Sky Paves the Way for OTT Future

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European pay-TV giant Sky has signaled the start of a long-term shift away from satellite broadcasting by launching an OTT version of its Sky Q TV service.

Debuting in the UK, Sky will roll the broadband-based service out in its other European markets—Italy and Germany, and Austria—over time. Subscribers can access via the internet or a new set-top-box, due in 2018, instead of using a dish.

Sky already offers a slimmed-down streaming package, Now TV, but Sky Q will be the full-fat version.

The company has identified a market for growth of around two million UK homes that cannot or will not install a satellite dish and a further estimated six million customers across Europe that do not have a dish. Many of these will be in urban areas where dishes are harder to install.

Sky has not announced whether the service will support UHD 4K broadcasts, or bandwidth to the home requirements for 4K.

The move is a response to competition from BT (who will discuss their upcoming OTT service at Streaming Forum next month) and to SVOD services like Netflix, and came as the company announced less than stellar half-year financial figures.

It reported a 9% fall in operating profits after paying more for broadcast rights to Premier League football matches. Churn had risen to 11.6% from 10.2% last year.

"Churn is not where we want it to be but we've got a good set of plans to bring it down," Sky CEO Jeremy Darroch said.

Sky added 140,000 Sky Broadband customers in the UK and Ireland in the last 6 months of 2016 to bring the total to 6.1 million.

“Over time, we will launch this service in our other markets, building on our position as Europe’s leading OTT provider.”

Sky is set to market its broadband packages using average download speeds in line with an expected new set of rules from the UK’s Advertising Standards Authority due this spring, which will aim to require ISPs to be clearer about the speeds they advertise.

Separately, the operator said it will launch its Sky Kids app in Germany and Austria and extend its streaming service, Sky Ticket, to more devices and platforms.

In a statement Sky said: "We will broaden our business further by launching our movie transactional service, Sky Store, in Germany and fully roll-out our targeted advertising service, Sky Adsmart, in Italy and Ireland."

Sky has accepted a £11.7 billion ($14.6 billion) takeover offer from Rupert Murdoch’s 21st Century Fox, which already owns 39% of the company. Fox needs shareholder approval and the greenlight from regulators in the UK and Europe for the offer.

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