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BSkyB Ready To Go To Next Interactive Level

By | November 3, 2003

      UK satellite broadcaster BSkyB is looking to significantly ramp up its interactive service offerings for its seven million subscribers. “We have a portfolio of interactive services, which are very popular. But, with seven million homes, you can’t solve every one of their interactive needs with 100 services or even 250 services. The key thing is to open it up to the mass market,” said Sky Interactive Technical Alliances Director Ian Valentine.

      In fact, Valentine does not believe there is a limit to the number of services that BSkyB can have on its platform. “You cannot have too many services, as long as they are organized properly. In order to manage a large number of services, we need to consider ways of delivering personalization. If people were able to personalize the services they see, it would not matter how many were out there, they would only see the ones they want.”

      While interactive revenues are only a small fraction of BSkyB’s overall revenues, Valentine believes they can have a positive impact, particularly on churn. “If these services become valuable, to the point where consumers wouldn’t be without them, this will be a factor in further reducing churn. These services will have an impact on churn in the future. Some of our flagship services like Sky News Active do have a positive impact on churn already.”

      Valentine is optimistic about the future of interactive TV services. He argues that while Internet penetration in the UK has peaked at around 50 percent, at some point in the future digital TV receiving equipment will reach 100 percent of UK homes, and thus digital TV will play a more significant role than the Internet in people’s lives going forward.

      Key Drivers For Interactive Success

      Valentine was speaking at the fifth annual Interactive TV Show Europe held in Barcelona last week where the interactive TV industry was debating what the key drivers for interactive success will be. BSkyB will play a key role in defining the interactive arena in Europe. With seven million subscribers, and a host of interactive services, BSkyB continues to set the benchmark in Europe for pay-TV operators. Others across Europe may well look at BSkyB before defining their interactive strategy going forward.

      In his presentation, Valentine talked about consumers using the most convenient device for digital lifestyle services. BSkyB has also learned from experience about what strikes a chord with customers. “One classic example of a mistake we made is that at the height of the boom, there were people inside the Open joint venture [a walled garden where there were a number of retailers], who thought getting one or two big retailers on that platform would add huge amounts of value. That was not the case. It isn’t that you can’t do retail through digital TV. But it is true that retail, in the form envisaged by Open, works just as effectively through the Web.”

      Valentine also spoke about the importance of understanding the new electronic lifestyles people were now leading. He spoke of the three ‘Es’ – entertainment, empowerment and engagement as being the keys behind BSkyB’s interactive strategy. Valentine believes enhanced TV services and e-business services are complementary. He believes broadcasters are able to create a rich, but controlled interactive TV proposition to suit their audience, while the platform as a whole is open and suitable for e-business.

      BSkyB is actively seeking partnerships with the e-business industry and believes it is now easier to add Internet services to existing TV platforms, than to add high quality, multi-channel TV to the Internet. Deriving revenues from e-business will be one of the major targets for BSkyB in the interactive arena.

      BSkyB is already looking to do deals with the government in this area. The company has “given the government access to our Internet compatible technology, which has opened the door for government services to be deployed on satellite. We have been more open on that than any of the cable operators. We also want to help them deploy their services on other devices. The government is very enthusiastic. They have got a whole team of people working on that and money to spend. I think you could see them being deployed next year,” Valentine said.

      In terms of the types of deals BSkyB is trying to do in the interactive arena, Valentine commented: “We are looking to partner with infrastructure providers who can provide content for service creation to build services. Some of those are creative. Some of those are technical. Some of them are content management systems geared around one thing like Teletext or digital text or some might be geared around the consolidation of government content.”

      –Mark Holmes

      (Robert Fraser, BSkyB, e-mail: )

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