Sky moves beyond the dish with IPTV plans

Sky has unveiled plans to launch Sky TV over broadband in the UK, marking the first time it will offer its full television offering without the need for a satellite dish.

Sky said its advanced Sky Q service will be available over IP, via a set-top box, from next year, opening up the service to “millions of homes” in the UK that are currently unable to install a dish.

The move marks Sky’s latest move into over-the-top delivery, following the launch of Now TV in 2012 – a flexible service that was targeted at customers that would not otherwise pay for a Sky subscription.

It also comes after Sky CEO Jeremy Darroch said in an interview last year that Sky was already seeing, and will continue to see, its business move from a “reasonably narrow satellite model today [to] a really truly multi-platform multi distribution business”.

Commenting today on Sky’s decision to offer Sky Q via broadband, Sky UK’s chief executive Stephen van Rooyen said: “This year is about giving our customers even more quality, choice and value.”

The news came as Sky announced its results for the six months ending December 31. For the period Sky said it added 500,000 new customers across all its markets – the UK and Ireland, Germany and Austria and Italy.

This took its total retail customer figure to 22.3 million – 12.65 million in the UK and Ireland, 4.86 million in Germany and Austria and 4.81 million in Italy.

Group revenue was up 6% on a constant currency basis to £6.41 billion but operating profit was down due to “significantly higher programming costs” – particularly relating to top-flight English football.

“Our first half operating profit of £679 million is down £65 million on the prior year despite absorbing an additional £314 million of Premier League costs, highlighting the strength of our underlying financial performance,” claimed Darroch.

IHS Technology senior principal analyst, Ted Hall, warned that Sky’s impressive results included some “notable caveats”, pointing out that Premier League costs in the UK lowered operating profits by 9% across the group and by 18% in the UK and Ireland.

“Keeping content costs down is a priority for Sky, highlighted by its carriage-fee dispute with long-time channel partner Discovery, which could see key factual channels and Eurosport disappear from Sky TV and Now TV on 1 February.”

In the UK, Sky said that it had increased returns on its box investment by making the Sky Q box standard for all UK customers, with around 25% of new customers currently choosing to pay for additional Sky Q functionality.

“Our plans to roll out Sky Q to our other markets are also on track,” said Sky, which introduced the service in the UK and Ireland last February.