BSkyB Has Big Post-Launch Plans for Now TV OTT Platform

[Satellite News 07-17-12] British satellite broadcaster BSkyB is launching its new Now TV over-the-top (OTT) Internet TV video service in the United Kingdom July 17, starting with a limited content offer.

   The service will initially roll out on PCs, Apple computers and Android-based mobile devices. At the end of July, the broadcaster will extend the service to the YouView connected TV platform after its launch on iOS devices, followed by Microsoft’s Xbox 360 game console later this summer.
   BSkyB Director of Now TV Simon Creasey said the service would start with on-demand movies from its Sky Store platform, with more than 1,000 titles being made on a transactional on-demand basis.
   “Now TV will bring more choice to U.K. consumers and an easy way to enjoy amazing movies, instantly,” Creasey said in a statement. “Following the explosion in Internet-connected devices, we know that more and more people are looking for great content to watch over the web, and that’s where Now TV comes in. Offering a new and exciting way to enjoy Sky Movies on some of the most popular internet-connected devices, Now TV gives films fans everywhere a new choice.” 
   Creasey added that BSkyB will be aggressive in the expansion of its service, adding five new and exclusive Sky Movies premieres every week, at least 12 months before they are available on other online subscription services. Sky also is offering a free 30-day trial of the Sky Movies Pass to all Now TV customers. Live sports coverage will be added to the Now TV service later in the year with the arrival of Sky Sports.
   “As we move forward, Now TV will get even bigger and better, with more devices and more platforms in the coming months. Customers can also look forward to the best live action from Sky Sports and great drama, comedy and entertainment from our Sky channels,” said Creasey.
    BSkyB CEO Jeremy Darroch in March first unveiled the service during an appearance on BBC in March.
   “This is the next chapter in our story and one we are very excited about,” Darroch told the BBC. “The Now TV service will be pay-as-you-go and OTT, meaning that the IPTV service will not require having a Sky contract or Sky hardware installed. About 13 million homes in the United Kingdom do not have access to paid content. So, our company saw an opportunity to broaden our growth through a variety of platforms and offer greater flexibility over how people watch TV. If we are going to keep growing, we need to appeal to people in different ways.”
   The launch of such a service was enabled by a more robust broadband structure that had emerged in the United Kingdom during the past few years, according to Darroch, who added that he wasn’t sure what kind of an impact the new service would have on the traditional BSkyB subscription model.
   “I will be watching the subscription figures,” he said. “The bottom line is that BSkyB had to look to new markets. We also are planning to commit more resources, specifically to our entertainment offerings. We will spend about 600 million pounds ($949.5 million) by 2014 on commissioning and producing U.K.-based content, which is a 50 percent increase in our current spending over the next three years.”
   While BSkyB believes Now TV is a significant step forward in the way broadcasters deliver video for consumption, Informa Telecoms & Media analyst Ted Hall noted that the company’s move away from its traditional pay-TV bundled selling strategy presents potential risks.
   “As a product for the post-10-million-subscribers era, it is a different kind of pay-TV proposition, one that removes the barrier of a long-term commitment in order to attract a new audience,” Hall said in a report published July 16. “The allure of such freedom could be stronger than Sky intends, with cost-conscious satellite customers now presented with a more flexible alternative – still accessible on the living room TV set – which they can switch to without having to desert their long-trusted pay-TV provider.”
   Hall also noted that the platform’s ability to allow users to pick the specific channels they want as part of their package could break from the economic model that has historically been successful for pay-TV. “This could lead many to question why they need a traditional subscription when the option to pay for only the content they actually want is available as an OTT alternative.”

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