BSkyB Funds Whistle Sport, Its Latest Video Start-Up Investment
While Rupert Murdoch aspires to unite the European Sky pay TV brands into a single entity, one of them, BSkyB has set about making a string of acquisitions in online media technologies.
The overall aim, as overseen by CEO Jeremy Darroch, would seem to be directed at safeguarding the future of the broadcaster as viewers shift away from traditional consumption behaviors.
BSkyB's investments include a longstanding one with Roku which powers Sky's IPTV service -- Now TV -- and in online sports network -- Whistle Sports, announced today. This deal, says Emma Lloyd, Sky's director of corporate business development, is part of “an ongoing programme of investing in innovative startups that help bring new ideas, insight, and services into its business.”
That makes sense as Sky faces increasing pressure to retain its crown jewels -- rights to English Premiership football matches -- from telco BT Sport which last year surprised many by outbidding Sky for rights to air a quarter of the matches. The next rights battle is due ahead of the 2016/17 season.
Sky credits better than anticipated first-quarter sales figures (up 6 percent to £1.926 billion by the end of September) to the strong performance of video-on-demand products Sky Go Extra, which lets customers watch content on mobile devices, and Sky Store.
Earlier this year, Sky opened an office in San Francisco, California, to help it forge relationships with tech start-ups, so expect additional investments. Here is a look at the deals so far.
Pluto.TV In mid-October, Sky took a $500,000 stake in this Los Angeles-based content aggregator, whose service is available online and via iOS, Android, Google Chromecast, Amazon Kindle Fire, and Fire TV. Pluto.TV uses a combination of data and specialist editors to create genre channels (such as music, news, and sport) along with niche channels like hip hop, gaming, and stand-up comedy.
Sky plans to gain insight into the way new forms of content shape emerging trends in how people find and watch TV. Pluto.TV says it will gain from Sky’s experience packaging and promoting content into channels.
Sharethrough Sky invested $5 million as part of a larger $10 million round of funding which concluded in mid-September (and also included Elevation Partners and Floodgate).
Sharethrough works in native advertising, creating software that lets publishers monetize their sites and apps with adverts that are non-interruptive and stylistically similar to the surrounding content. Its technology provides advertisers with an automated solution to match online ad campaigns to the webpages they're hosted on.
Sky’s relationship with the company began in 2013 when it became the first U.K. media brand to work with Sharethrough, offering native advertising on skysports.com.
Sky will adopt native advertising across its portfolio including its pay TV platform, Sky Broadband and Now TV, in addition to using its own targeted ad service, AdSmart.
Roku Set-top box maker Roku has received $12 million of Sky cash since July 2012, and provides the technology for the Now TV streaming service that Sky is using to experiment in non-satellite TV distribution.
Whistle Sports With its $7 million investment Sky will work to target “young millennials,” which Sky fear may desert TV for online sports. Whistle Sports says its library of 28,700 videos and 192 channels has generated 1.25 billion views. It counts 8 million YouTube subscribers and 9.3 million Facebook fans.
Whistle Sport partners with online personalities who create unique video content themed around sports, sports brands, and franchises. It has relationships with stars such as Ultimate Frisbee champion Brodie Smith and NBA player Jeremy Lin, and also works with sports leagues and franchises such as the NFL, PGA Tour, NASCAR and Major League Baseball Advanced Media to help them engage with younger fans.
The company's new London office is headed by former global head of football for YouTube Jeff Nathenson, giving the Whistle Sports team easier access to Europe’s top leagues and athletes.
In a statement, Barney Francis, managing director of Sky Sports, explained: “Whistle Sports has very quickly established itself in the U.S. as a major new sports network. We see lots of potential to harness Sky Sports’ content and relationships with major sports bodies and brands to work alongside Whistle Sports’ talent network.”
1 Mainstream Sky outlaid $2 million in August 2013 on this Cupertino-based start-up that speeds up video-streaming. The company says it's the first software-as-a-service platform that automates app creation and streaming, and it also manages ad serving and billing for connected devices. Supported devices include Apple TV, Google TV, Samsung smart TVs, Roku, Xbox, iPad, Kindle Fire, and Android tablets.
Sky selected 1 Mainstream to create its Sky News app for Apple TV and Roku, and credits the company for its half-million new viewers per month in the U.S. and Canada, as well as its expanded reach in the U.K. and Ireland.
"Our work with Sky, Apple TV, and Roku demonstrates that innovation is still very much alive and well in TV -- instant global distribution to a highly-engaged digital audience is now here," said Rajeev Raman, CEO of 1 Mainstream. "It also demonstrates that VOD is no longer the only game for IPTV. We are blurring the lines between traditional and internet delivery."
"News consumption is changing fast and our goal at Sky News is to set the bar for innovative and creative content distribution. We have been delighted with the response to Sky News in North America following our partnership with 1 Mainstream," says Andrew Hawken, editorial director for Sky News.
1 Mainstream is also backed by DCM and Menlo Ventures.
Jaunt VR Having doubled its initial $350,000 stake made in December 2013 with another $400,000 in July 2014, Sky signaled it has its eye on the potential of this emerging entertainment media. This Palo Alto-based startup is developing virtual reality acquisition and production technology, with Facebook-owned Oculus Rift a supporter. Sky is believed not to have commissioned any VR content as yet, but its interest in the immersive media chimes with that of Hollywood studios like Fox which are experimenting with promoting cinema releases via VR headsets. Live streaming capabilities and real-time interaction with fellow users are part of the virtual reality roadmap, something that BSkyB -- a pioneer and world leader in live stereoscopic 3D TV sports -- would be interested in as a possible application for sports broadcasts. Google Ventures and Redpoint Ventures are among Jaunt VR's other investors.
The Bigger Picture
Rupert Murdoch's long-held master plan for a pan-European pay TV business is still in the cards.?The deal is being brokered through 21st Century Fox, owned by News Corporation, which in turn owns 39.1 percent of BSkyB. Fox owns Sky Italia, has a 57.4 percent interest in Sky Deutschland, and will transfer both to BSkyB provided it can match the valuation of Sky Deutschland shareholders.
In a statement about the Whistle Sports deal, BSkyB's Emma Lloyd said: "We can integrate their technologies or ideas into our business, help test concepts, refine business models, and, of course, provide a bridge into the European market. This bridge will only get bigger when our transaction with Sky Deutschland and Sky Italia is completed."
Traditional broadcasters are challenged by upstart online platforms that are doing a better job serving connected consumers. The trick is to join with OTT, but do so in a way that enhances—not overwhelms—the experience.
Young sports fans are going to sites like Whistle Sports and Copa90 to catch the action, supporting a new style of sports coverage that invites fans into the conversation.
IT Director Colin McQuade says Sky uses the cloud heavily for OTT and on-demand, but that it isn't yet ready to deliver the "holy grail"—offloading everything that currently sits in a data centre or broadcast facility.
Reporting live news video over fiber might seem more reliable, but IP delivery offers better cost, quality, and convenience.
Competitors will have a hard time beating the Now TV Box on price. That £9.99 even includes shipping.