3Vision Insight - Sky takes on Virgin VOD with the launch of Anytime+
08 Jun 2011
As part of our ongoing series of 3Vision Insights we have profiled Sky as they launched their enhanced VOD service, Sky Anytime+, which began its roll out in October 2010.
This new service is an extension of their existing satellite-based push-VOD service, Sky Anytime, whereby customers could only access selected content within a limited timeframe. Sky Anytime+ operates through a broadband connected pull-VOD set up, allowing customers to watch a wider range of content instantly and progressively download others.
This is a significant step forward for Sky as customers now have a pathway to thousands of hours of what they market as ‘free’ content without the usual limitations associated with push-VOD. However, the catalogue is only available with Sky TV (via a Sky+ HD box or one Sky+ box version) and a Sky broadband connection. To activate the service customers can either connect an Ethernet cable from the Sky broadband router to the STB, or purchase a Sky Wireless connector for £60, then activate the service online. Once connected customers simply go to the TV Guide and select Anytime+.
The enhanced movie inventory is an area of key focus for Sky, which appears to be expanding rapidly beyond the originally marketed number of 500 titles. By offering more choice, they strengthen the premium position and will expect retention benefits as they:
- Defend themselves against potential OTT movie threats (e.g LOVEFiLM or Acetrax)
- Position themselves against UK Regulatory intervention (where they have been accused of warehousing SVOD rights)
- Dilute cable and IPTV’s VOD USP
Sky have been marketing the service heavily and have incorporated Anytime+ into most customer communications – and we have seen evidence of segmentation by users network location, with key broadband up-sell targets getting a louder message. Sky Movies adverts follows the traditional VOD messaging lines of ‘watch whatever you want’ and ‘hundreds of movies to choose from’ and using ‘Box Set’ and ‘Seasons’ terminology when promoting the TV services. Sky’s marketing campaign follows on from their fairy tale ‘Happily Ever After’ theme that has run in recent adverts for Sky Broadband by launching a series of TV commercials featuring King Arthur and the Round Table with an emphasis on simplicity of set-up.
Sky Anytime+ has been heavily promoted as a free added value service at ‘no monthly extra cost’ but in reality this cannot be said for all customers and is disguising the real facts. Unless you already have Sky Broadband Unlimited, customers will have to pay more in order to make full use of the service. Whilst Sky is not hiding the requirement for TV and Broadband, existing TV only subscribers will have to take Sky Broadband Unlimited at an additional £12.50 per month (along with their BT line rental), or if they are Sky Talk customers, broadband will cost just £7.50 (whilst paying for Sky’s line rental). Sky Broadband Lite customers will also have to upgrade to Broadband Unlimited as downloading shows counts towards their 2GB cap and therefore limits how much they can watch – only three half hour programmes will consume their monthly data allowance. Kathryn Downward, Head of TV Services at Sky said that locking the service to Unlimited customers wouldn’t be fair “we didn’t want to limit it, that would be excluding people who only want to watch a couple of items”. Downward also stated "Limiting it to Sky Broadband meant that we could ensure that any problems were not with [other ISPs] networks. It meant we could guarantee the best possible customer experience. But it is still our intention over time to bring in other ISPs as long as they do the work to make sure that we can have a seamless experience."
All content is related to broadcast channels, with Sky being the main source - Movies, Sports and General Entertainment. There is also additional, but limited content, from 3rd party channels which is split in to five main genres - Movies, Kids, Entertainment, Sport and Documentaries. Most creative programming is coming from the entertainment genre, where shows are generally available for 30 days catch-up, but Sky are offering older seasons in complete box sets, some part box-sets, and some premieres of the new season shows prior to linear broadcast.
Awareness of Sky Anytime+ will grow as they continue to roll-out their above-the-line campaign across cinema, TV, outdoor, press and online. The pull-VOD service undoubtedly offers extra value for Sky customers, but its dependency on Broadband Unlimited may dilute the impact if customers don’t want to go through the effort of switching broadband suppliers. It will be interesting to see how well Anytime+ connection levels (usage), broadband subscriber additions (cross-sell) and Broadband Unlimited Tier penetration levels (product up-spin) improve. Over the last four years Sky achieved 30% broadband penetration and as Pay TV growth passes 10 million they will continue to chase down the remaining UK population yet to take Sky, but they will also be looking for growth with other products - with broadband and telephone growth a key opportunity. The product is missing some of the key components of successful VOD services, especially catch-up services from free-to-air channels (which command over 50% of Virgin Media’s VOD monthly viewing). So whether Sky will be able to persuade more 3rd party channels to come on board, and what financial terms they may offer some of them in order to achieve this, will be interesting to follow.
3Vision Insights is a series of profiles documenting and providing comments on interesting and significant developments in our industry - previous editions include the launch of Hulu Plus, Sky 3D, Sky Atlantic and Netflix reaching 20m subscribers. We share these with our clients and close contacts to help them keep up to speed with what's happening. To be included in our distribution list for the 3Vision Insights series, and for the full Sky Anytime+ profile, please contact us.