BSkyB is making a serious move into the online TV market, launching its own service later this year. Yes, it will likely cannibalize the company’s own business, but it’s a very necessary step at this stage in time.
BSkyB
BSkyB is the satellite television broadcaster in the U.K. which is part of Rupert Murdoch‘s megacorps. It has built a profitable business by offering pay TV subscription services to people the length and breadth of Great Britain, competing with cable providers Virgin Media along the way.
Thanks to BSkyB both snapping up top-rated U.S. imports such as Lost, Glee, and 24, and owning the rights to Premier League soccer games, it has managed to secure a place in the homes of millions of Brits.
However, the number of people signing up is slowing down, from 140,000 to just 40,000 year-on-year in Q2, with the economy being blamed on people being unwilling to make a longterm commitment. But perhaps they no longer need to.
Online Services
BSkyB is promising to roll out a new online TV service by the end of 2012. We don’t know the name or the pricing structure, but we do know there will be a variety of options to suit all budgets, there will be no minimum contract, and it’ll be available on a range of devices.
The online service from BSkyB will target non-subscribers. Sky Movies will be the first offering, followed by Sky Sports, and eventually other entertainment channels.
Sky has been offering an online service for some years, but Sky Go is currently only available to existing subscribers. This is, therefore, a big change in its strategy.
Conclusions
BSkyB knows what it’s doing, and has probably been planning this move for some time. The company has realized it’s going to lose out to the free and paid-for Internet options which are starting to invade the U.K.
In the U.S. cord-cutting has grown in a big way, and it will grow in the U.K. too. Better to act now and risk cannibalizing parts of its own business than wait and lose all its customers to the new default way we’ll all be watching television and movies in the not-too-distant future.
[Via PaidContent]
