Sky Offers Subscription and On-Demand Netflix Alternatives

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In a bid to counter the threat of Netflix -- and immediately following its announcement of record quarterly profits -- broadcaster BSkyB has signaled the launch of a new internet TV service.

Coming in the first half of 2012, the new service will provide streamed rental access to a range of Sky content, including hundreds of films from Sky Movies.

Using the service won't require a subscription. Instead, customers will be able to either pay monthly for unlimited access or rent individual movies on-demand. Sky says the service will soon expand to offer sport and entertainment with more details revealed closer to launch.

The service will be available to anyone in the U.K. with a broadband connection, and is targeted at the 13 million households that don't subscribe to pay TV.

In a statement, Jeremy Darroch, Sky's CEO, said: "This exciting new service will offer some of Sky's most popular content through a wide range of broadband connected devices. Alongside the continued growth of our satellite platform, this will be a new way for us to reach out to consumers who love great content, but may not want the full Sky service."

While broadcasters and cable TV providers including Virgin and BT are also increasingly offering on-demand services, it is Sky which will feel it has most to lose from Netflix. Netflix launched its service in the U.K. and Ireland earlier this month. Fellow streaming VOD provider and U.K. market leader LoveFilm, which is owned by Amazon, has more than 1.4 million members.

Sky's move should offset the slowdown in Sky's TV subscriber growth. Sky grew numbers at a less than expected 40,000 in the last quarter, bringing its total to 10.5 million households. Underlying profits grew 16 percent to a record £601 million ($947 million USD) in the six months to December 31, with revenues up 6 percent to £3.4 billion ($5.3 billion USD).

This boost is attributed to increased subscriptions to other products, notably broadband and telephony, which increased by 772,000.

Since July 2011, Sky has offered online and mobile access to Sky TV services with Sky Go, which now has 2.5 million households customers signed up.

To cement this growth, Sky is about to launch its public Wi-Fi service, free to Sky Broadband Unlimited customers, from over 10,000 hotspots powered by The Cloud in restaurants and cafe chains.

Sky Go is expanding to Samsung Galaxy and HTC Android handsets (alongside Apple iOS products), while Sky Entertainment channels will also be added.

In a statement, the broadcaster said: In the last three months of 2011, Sky sold more than half a million home communications products, cementing its position as the fastest growing home communications provider in the U.K. The latest growth means that, since launching in 2006, Sky has grown its U.K. broadband market share to 17 percent (3.6 million customers) and 29 percent of all Sky homes now take all three of Sky TV, Sky Broadband, and Sky Talk.

Yesterday, Sky announced the addition of BBC iPlayer and ITV Player to its on-demand platform, Sky Anytime+, which will be available to all Sky+HD homes with an internet connection (of which there are more than 4 million) by Easter this year.   

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