M+E Daily
BSkyB Joins UK’s Internet Video Fray
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By Terence Keegan
While British Sky Broadcasting may be seen as “tak[ing] on Netflix” and Amazon’s Lovefilm with its new Internet video service, the pay-TV incumbent’s “premium” streaming content promises to be quite different from what either rival offers.
But how long will Sky’s lock on first-run movie rights last? The answer to this question will hold implications for the overall value of the UK’s emerging Internet video market to studios and companies involved in the business of digital content distribution.
Sky is leveraging its exclusive distribution rights for a majority of Hollywood’s new-release films (within the UK’s first subscription pay television window) with its Now TV service, which is set to launch Tuesday. Streaming movie rentals are available a la carte for prices ranging between 99p and £3.49 each, or via unlimited-streaming subscription at £15 per month.
Sky’s movie streaming services represent an unbundling of sorts for the company: as The Guardian points out, Sky has previously marketed its movie channels as a £16 per month add-on to its £21.50 per month premium-TV package.
Competing UK streaming services cost considerably less. Lovefilm Instant carries a starting price of £4.99 per month (excluding “pay per view titles”), while Netflix charges subscribers £5.99 per month. But Stephen van Rooyen, Sky’s managing director of sales and marketing, tells The Guardian, “[W]e don’t want to replicate what LoveFilm and Netflix have done.” The value of Sky’s service, van Rooyen says, “is in the premium quality” of its content: “We offer around 75% of the top 100 box office movies, and have rights to offer films a year before rivals.”
Still, if the UK government’s Competition Commission predicts accurately, Netflix and Lovefilm will be stepping up their competition for first-pay-window movie rights going forward. So the consumer value proposition for any of these services may still be in flux.
And the ultimate question remains of whether consumers see eye to eye with service providers (and content owners) on the valuation of windowed access to movies. For Hollywood, much depends on the sustainability of a “premium” streaming market: the licensing fees it collects from such a model could bolster studios’ home entertainment business against declines in packaged media sales.
