BSkyB’s OTT service Now TV is a response to underlying technological change and not to the launch of Netflix, according to Sky’s chief operating officer Mike Darcey. Speaking at the IBC conference in Amsterdam this morning, Darcey said that Sky’s main goal with the service was to appeal to free-to-air homes that had hitherto been resistant to pay TV.
Broadcasters that embrace new innovations and trends are likely to win out over those who appeal to regulators or attempt to resist change by other means, said Darcey.
Getting content as widely distributed as possible was key to allowing Sky to make a return on its investment in content, said Darcey. He said that free-to-air homes were willing to pay for content on their own terms, evidenced by the fact that people went to the cinema and rented movies to view. “That’s why we launched Now TV,” he said. “There are now two distinct ways to access and enjoy content form Sky – the full-fat version and semi-skimmed.” He said Sky now had “two rods fishing in the pool” of the UK’s remaining free-to-air homes. He also said that BBC-backed connected TV platform YouView represented “a promising route” to reach out to new homes.
Live viewing of TV still dominated time spent viewing video content in the UK, Darcey told attendees. For sport in particular, live viewing was crucial, he said. This did not necessarily mean viewing on the TV screen. For flagship dramas like Mad Men, meanwhile, fragmentation of viewing and time-shifting was increasing.
Hybrid viewing and the use of second screens as companion devices was clearly on the increase, and Sky is catering to this, said Darcey. “The key is getting the connectivity between the satellite service and third party devices such as the iPad,” he said. “The challenge for us is to get these devices to talk to each other and also to sort our the rights issues.”
Darcey said that Sky would increase its investment in UK-originated programming from £450 million (€570 million) to £600 million by 2014. Sky believes that success comes from content worth paying for and from making it easy for users to access that content, said Darcey. He said that Sky’s customers came to it primarily for content rather than for “boxes or for pipes”.
“Every year we’ve been in operation we’ve increased the amount of money we’ve spent on content,” he said. “Initially we focused on movies, sport and 24-hour news.” He said that Sky was still looking to add depth and breadth to its sports offering, but was now focusing on adding to its entertainment portfolio. He highlighted investment in channels including Sky Atlantic, Sky Living and Sky Arts.
Darcey said the content gap between pay and free “should continue to widen” meaning that the pay share of viewing in Sky homes would continue to increase.
Addressing future technology priorities, Darcey said the jury was still out on 4K TV. “One issue is [whether] people’s houses are big enough to benefit from this in the UK,” he said.
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