Sky has ramped up its battle with BT with the launch of a new version of its Now TV service allowing customers to sign up to monthly pay-TV, broadband and phone bundles without a contract – which the broadcaster claims is the first plan of its kind in the UK.
The new Now TV Combo service, which uses a standalone web-connected box, allows Sky customers to choose TV packages such as entertainment, sport or cinema and combine them with broadband and phone packages on a rolling basis.
Though the flexibility mirrors services that rivals such as Netflix and Amazon have begun offering, the combination of broadband, TV and phone is squarely aimed at BT, which has aggressively moved into the TV market from a position of strength in communications.
The telecoms giant has successfully secured exclusive rights to Champions League football matches, as well as a significant chunk of the Premier League games that have helped Sky become the dominant player in UK pay-TV.
Stephen van Rooyen, chief executive of Sky’s UK and Ireland business, said the new packages were aimed at the 40% of people who don’t currently take pay-TV of any kind, while also taking market share from broadband competitors, of which BT is the biggest.
“The market is characterised now by some form of triple play. As an organisation we have had an investment in building a broadband network, which has worked really well for us
.”
The TV packages are: Sky Entertainment, including shows such as Game of Thrones on Sky Atlantic and Geordie Shore on MTV, Sky Cinema with the broadcaster’s revamped movie channels including a new premiere ever day from 8 July, Sky Sports including channels showing the Premier League such as Sky Sports 1 as well as its dedicated F1 channel, and Sky Kids, with channels that include Nickelodeon Kids.
Sky claims the bundles are the first contract-free bundles to include phone, broadband and pay-TV, which Now director Gidon Katz said were designed to meet a “desire from free viewers to get a little bit of pay-TV bundled with their broadband … The desire for control, the desire for the freedom of a no-strings commitment.”
The introduction of Sky’s Now in 2013 was a radical departure for the broadcaster, which has traditionally focused on signing up customers to long-term contracts for its expensive satellite packages. However, the new packages take it a significant step further away from tying in customers.
By far the most significant step is the move away from fixed-term contracts. These have been a mainstay of telecoms services, in particular mobile and broadband contracts, which have often offered significant discounts or sweeteners for signing up to one or two years.
Van Rooyen added that Sky had not yet factored in the economic uncertainty created by the vote to leave the EU into its projections for Now TV.
“We have been working on this for 18 months. The recent outcome from the Brexit vote doesn’t change our fundamental thesis that there is demand for this kind of product or service. Whether or not this accelerates that is a question, and only time will tell.
“It’s a little early for us to revaluate our projections. I don’t think the horizon is clear yet. As a business, we are extraordinarily resilient to changing times If you look at our performance during the recession, we were held up as one the of the strong performers during that time, entertainment seems to be more valuable in people’s homes when [times are] tough.”
Packages, which include a Now TV box, start from £9.99 and range up to £51.99, however, a sticking point for some consumers may be the telephone line rental charge, which adds as much as £17.99 to a monthly package.
