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Sky VOD service will be advertising supported

June 03, 2010

UK pay TV operator Sky says its new progressive download VoD service will carry pre-roll advertising before the movies and TV programmes bundled free with viewers' subscription tiers, as well as feature a paid-for Box Office area for new blockbuster movies. Called Sky Anytime Plus, the service will launch 'later this year' and offer 500 movies and thousands of hours of entertainment content with access mirroring a customer's subscription.

Sky says it sees the new service as an archive of movie and entertainment content and has no immediate plans to offer a 'catch-up' service. Users will need a Sky HD box, but not necessarily a subscription to the HD tier. No HD content will be included at launch. Initially a Sky Broadband subscription will also be required.

Sky has just simplified its broadband offer to a two-tier option of free with a download cap or unlimited for £7.50 a month. Both services offer up to 20Mbit/s download speeds. Sky will 'recommend' VoD users take the paid service. Users can chose a wired or wireless solution to connect their Sky box to their home router with an optional engineer install. The new VoD service will be accessed through the existing Anytime menu on the Sky EPG which will now display push content (still delivered via satellite), downloadable content and on-demand branded channels. At 2Mbit/s, long-form broadcast quality content requires about one minute of buffering before it is available for viewing. Multiple content items can be queued for download, but will download sequentially.

Sky's decision not to offer catch-up seems like a missed opportunity given the popularity of such services on Virgin's cable platform and through the BBC iPlayer. While it is obvious that Sky would not be eager to follow Virgin and integrate BBC iPlayer functionality into its own VoD service, it seems a strange decision not to develop a catch-up offer for Sky-branded channels. Sky claims that its current Anytime push service and Sky Plus DVR fulfill the role of catch-up, but this combination doesn't allow users to view shows that they hear about the next day from friends and colleagues, surely a key benefit of true catch-up. Sky's advertising strategy is not surprising, given that the Anytime push service already features advertising before and during shows. The strategy regarding specific Anytime advertising sales is still being worked out, not least because users are able to fast-forward through the pre-roll adverts, even on downloaded content. Tying the service to a Sky Broadband subscription for quality of service control' is also a wise move. As well as pushing customers towards paid broadband (users will hit the broadband cap on the free service with a single movie a month combined with regular surfing) it is likely to also boost uptake of the Sky phone service due to pricing differentials on broadband with and without a Sky Talk service. Although Sky is remaining tight-lipped on an exact launch date, it will begin staff trials next week and it seems certain that a late Q3 2010 launch would be the best strategy, allowing time for a marketing build-up pre-Christmas. We expect the new service to have a moderately positive impact on overall subscriber growth and a more noticeable impact on paid broadband uptake and telephony.

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Countries: UK
Companies: BSkyB
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