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@ Changing Broadcast: Sky To Do Web-Only Pay-TV; Sports First, More May Follow

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BSkyB (NYSE: BSY) is to offer its live TV channels as online-only monthly subscriptions, COO Mike Darcey said in a keynote address to MediaGuardian’s Changing Broadcast Summit in London this morning. The simulcasts will come in channel bundles through the satcaster’s PC-only SkyPlayer service, which already offered channel content as catch-up VOD and which will also work on Mac.

SEE ALSO: More Sky Woe: Forced To Offer Channels, Picnic Cleared Posthumously

It’s a new subscription revenue stream for Sky, which has postponed its ambitions of launching a subscription service on top of Freeview, codnamed “Picnic”. Unlike some of the VOD offerings, the new SkyPlayer simulcasts will not be tethered to a TV subscription. Darcey: “Essentially we are talking about taking a Sky subscription service and making it available online. You don’t need a satellite dish, you don’t need to be a Sky subscriber: you can be a Sky subscriber online now.”

The channel lineup hasn’t been finalised but Sky Sports 1, 2 and 3 will come first with others to follow. The strategy replicates the bundles paradigm that has served Sky so well for the last couple of decades. While some may still be put off by the diminished viewing quality – certainly compared to SkySports in HD -  Darcey said broadband speeds had become fast enough to provide “very good” viewing.

Despite posthumous Ofcom approval, Picnic is now in a “regulatory logjam”, he said, so Sky is looking for new distribution options: “Our mission was to increase the choice available ... we believe consumers would welcome the opportunity to receive Sky Sports through their aerial.”

Sky’s the limit: Darcey said that, despite a slowdown in new subscriptions in the last few months, the company would not just reach its stated 10 million target for paying subscribers but would go on to beat it after that. The industry is, he said, a long way from a saturation point: “I’ve lost count of the number of times that Sky has (supposedly) signed up all the people who will ever pay for sport ... yet here we are today with more than nine million customers, a third more than when Freeview launched in 2002.”

Digital innovation drives organic growth: It’s the forward-thinking digital projects that will secure Sky’s future, according to Darcey. He cited the things like Sky+, which was unpopular at first but now taken by three in four new customers; switching to fully digital; putting its film library online and investment in HD as the reasons people continue to choose them over a one-dimensional and non-dynamic free-to-air offering. On the back of his online VOD platform announcement, Darcey said Sky was keen to expand further into sectors beyond its satellite channels and increase syndication of content working with third parties. Work is well under way on bring more Sky content to Sony (NYSE: SNE) PSP handheld games consoles and mobiles.

—Tie Kangaroo down:  “It’s not clear to me it needs to be done with the three of them together,” said Darcey of the ITV/BBCWW/C4 JV Kangaroo, currently the subject of a Competition Commission review. “As a group they are collectively able to set conditions for supply for a very significant proportion for their archive materials themselves. it’s not clear what is gained by coming together.”

Nov 10, 2008 6:28 AM ET

Posted In: Entertainment, Sports, Media & Publishing, TV, IPTV, Satellite, VOD, Companies, News Corp., BSkyB, changing broadcast summit

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