Sky Unveils NOW TV, But No Pricing

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BSkyB has announced that its new internet TV service, offering on-demand access to Sky content separately from its TV channel subscription, will be called NOW TV.  However, the company didn't reveal pricing details, which may be key to the venture’s chances for success.

The introduction of Netflix into the UK in January prompted a price-cutting war with Amazon-owned LOVEFiLM, moves which threatens to undermine BSkyB’s subscription base.

Launching later this year, NOW TV will provide instant access to hundreds of films from Sky Movies and other content.

In a speech at the Media Guardian Changing Media Summit in London, Sky’s Chief Executive Jeremy Darroch explained: “The launch of a second brand is an exciting opportunity for us and the rationale is very simple. Having two brands will allow us to meet the needs and preferences of different customer segments more effectively.

“We’ll offer two distinctive ways to watch: the market-leading full Sky service for the whole family, complete with the widest range of channels, high quality products like Sky+, HD and Sky Go, and the peace of mind of a monthly bill; or the . . . pay-as-you-go service of NOW TV.”

Providing detail on the service, he added: “It will be available on a wide range of devices and offer instant access to a range of high quality Sky content. Starting with movies, it will soon expand to offer sport and entertainment as well.... customers will be able to pay monthly or rent a movie on a simple, pay as you go basis.”

Darroch told the conference that, alongside the continued growth of its satellite TV service, broader distribution on other platforms is an opportunity for Sky to broaden its reach.

“As the quality of the TV experience over broadband has improved, people have become more willing to consume content in different ways.

“That presents a great opportunity to distribute our programmes which wasn’t there even a year or two ago. With the long-awaited explosion of connected devices now upon us, this opportunity is only going to grow. And it’s something we believe is highly complementary to our existing service.

“Today, we know that around 13 million homes don’t yet take pay TV from any provider. So we can reach out to them and offer them another way to access and watch our content.”

IHS Screen Digest research predicted that the UK’s total 2011 VOD viewing was 3.6% of total TV watching, including user-generated content on sites like YouTube.

Only when time-shifted viewing on PVRs like Virgin Media’s TiVo, Sky+, and Freeview+ are added to the forecasts does the percentage of non-linear TV viewing double by 2015 to at least 12%.

The analyst also estimates that the UK's online TV and movie market should more than double over the next five years to reach £690 million by 2015, against an estimated TV ad market by 2015 of £3.8 billion and a pay-TV market worth £7 billion.

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