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BSkyB is to launch an internet TV service that will open up its content to those that do not subscribe to its pay-TV offering, taking on the likes of LoveFilm, Netflix and soon-to-be-launched YouView.

The platform will allow Sky to reach the 13m households in the UK who do not subscribe to any pay-TV service, by offering films, and eventually entertainment programmes and sports, at a cheaper price than its traditional model and without the need to sign up to a minimum contract.

It will be available in the first half of this year across a “wide range” of connected devices, including PCs, laptops, tablets, mobiles, games consoles and connected TVs.

Jeremy Darroch, Sky’s CEO, said: “This product launch will build on our early leadership in multiplatform distribution. It will allow us to make our expertise and investment in content and technology work even harder, extending our options for continued growth.”

The launch comes as Sky marked a slowdown in the number of households that signed up to its TV service. It added 40,000 net new customers in the second quarter of last year, down from the 140,000 customers that signed up in the same period the previous year.

Marketing costs fell 12% to £541m in the six months to 31 December as it scaled back acquisition activity in favour of retention. Above-the-line advertising costs were reduced by £10m year on year and Sky said it also achieved the “expected savings” by closing its customer magazine.

Sky’s underlying profits grew 16% to £601m – a record in the six month period – as the company continued to grow its broadband and telephony services. Revenue was up 6% to £3.4bn in the period.

In the year ahead, Sky says it aims to bring more “high-quality” content to Sky customers, including a new channel dedicated to Formula 1, a social TV offering and VOD content from the BBC iPlayer and ITV Player.

Sky also said it aims to create more than 1,300 jobs across the UK and Ireland over the next two years as it looks to bring more of its customer service staff in-house and open up a service centre in Dublin.

This story first appeared on Marketing Week


Published 31 January, 2012 by NMA Staff

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