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News Corp’s part-owned UK pay-TV leader BSkyB has launched Now TV, its service to grow pay-TV custom over internet devices instead of satellite.
The man leading the new effort, which is a kind of lean start-up within BSkyB, is launch director Simon Creasey (previously, a Sky marketing director), with whom I spoke at Now TV’s London media event on Monday…
RA: Why did Now TV have to be a new brand?
SC: “We wanted it to be. This is a brand new service offering access to Sky’s content in a fresh way. We’ve got ‘Powered by Sky’.”
RA: Are you trying to form a protective shield around the Sky brand, to minimise collateral damage if Now TV doesn’t succeed?
SC: “No. These two services will co-exist and we’re talking to very different audiences. We don’t want to confuse our 10.5 million Sky customers either. It’s all about appealing to different people.”
RA: Do you foresee any Sky satellite subscribers switching to Now TV?
SC: “We’re not worrying about ‘cord cutting’. We think this will appeal to the fresh people who haven’t currently made that (pay-TV) decision. The other guys (Sky subscribers), we know, are really happy, taking a multitude of Sky services.”
RA: Sign-up requires a Sky iD. What’s the reason? Up-sell satellite subscribers to Now TV viewers?
SC: “Sky is the trusted provider. ‘Who is this fresh upstart that’s got Sky content?’ Ultimate, it’s got the Sky backbone, in terms of technology and quality and trust and security that Sky gives you. Mini has always been a pretty cool brand but now it’s got, effectively, the quality, trust and security that goes with ‘Powered by BMW’ as opposed to British-Leyland, or whatever they were before.”
RA: How did you arrive at the pricepoint for Sky Movies?
SC: “It’s really comparable with what people pay on the satellite service.”
RA: How does it square up against Netflix and Lovefilm? Netflix’s marketing has started to create consumer awareness for this kind of service. £15 is three times more expensive.
SC: “People have different content needs. We’re pretty sure Sky Moves is going to be great value. There’s going to be something for everybody. We’re confident our pricing represents really good value. Ultimately, it’s about the content.”
RA: Why no HD?
SC: “We’re moving pretty quickly to get to 720 on Xbox. We know the big screen is really important. People are going to want to watch this on their main TVs. That’s where we’re putting lots of focus on getting our streaming quality even better. We’ve spent lots of time on adaptive bitrate – the worst possible thing is getting interrupted viewing. Over time, we will develop, with the rightsholders and the DRM, once they meet the right levels and we’re confident, then we’ll look to increase the streaming quality as well. It’ll get better.”
RA: So it’s a technology reason rather than a business strategy? Holding back premium features for core Sky bundles?
SC: “It’s a combination of technology, compatibility, rights etc.”
RA: Could we see 3D movies on Now TV?
SC: “Technologically, I think you can. I don’t know that’s what consumers will be craving for on their devices. If we find out that they are, our tech guys know how to develo pfor that.”
RA: What are your targets?
SC: “We’re not announcing any specific targets. There are 30 million non-pay households – they pay for movies in other ways, so it’s not as if they don’t want the content. We’re going to open it up, turn it on.”
RA: An irony is, the BBC conceived YouView as a way to deliver internet VOD experiences outside the pay environment, and yet here is Now TV coming as one of the main content providers on YouView.
SC: “YouView is here. If it becomes a major platform, we want to be on it.”
RA: You’re not talking about connected TVs yet, only boxes and devices. Why not?
SC: “We’re in conversations about that. We know that TVs are important. We are talking to all the major ones. We’re not ready to talk about what deals we’ve done or which ones we’ll be on.”
RA: The absence of sports and entertainment packs suggests you’ve pushed out the movie service initially to go heads-on with Netflix and Lovefilm.
SC: “You have to start somewhere. We know there’s loads of demand out there for movies – people are already accessing it in all sorts of different ways already. The others aren’t far behind. Our research says, at £15, there’s loads of demand out there.”
RA: How will the other two propositions differ?
SC: “The principles of Now TV are the same – a flexible way to get in to the content and no contract. We’re not ready to say about pricing or packaging but it will be different to how we do it on satellite, we’re looking for a fresh, different way to bring people to the content, so there’s no point in packaging it the same.”
RA: Does the sports package need to be available for the new Premiership season in August?
SC: “Does it ‘need’ to be? It doesn’t necessarily. It would be great if it was, but people are always going be on sports wherever we are in the calendar of sports.”
RA: What will the entertainment package comprise? Basically, Sky Atlantic and Sky 1?
SC: “We’ll be looking at all of Sky’s content in entertainment. We’ll be looking at what we can bring, how we can package it. Giving people a new way to access that content is what we’re focused on.”
RA: Give me an idea of the formation of the Now team within Sky. Is Now regarded as an experiment or is Sky in it for the long haul?
SC: “I hope Sky is in it for the long haul because that’s my full-time role! It’s very much a cross-functional team. We’ve been gathered together – lots of experience in technology, product development, marketing and sales. There’s new people in as well – a mixture of people from other parts of the industry as well as Sky.
“We’ve got a very big technology team looking at how to get on to all the different devices. If you imagine, to get to this many devices for launch, we’ve had a pretty big team – we’ve got nearly 100 technology guys and then all their colleagues building for Sky Go etc. Because we’re a very collaborative company, we can dip in to other parts of the team.
“We’ve got Sky Go that’s been built for several years now and have pulled those people in and their skills in.”
RA: The way customer support will be delivered – without a call centre but through live chat and crowdsourcing – suggests a much more cost-efficient way.
SC: “It’s a much leaner way. We’ve got the opportunity because we’re starting afresh. We can use all the modern technologies now available – live chat, forum, any community help but also knowledge-based articles. This is an online service – people are going to be connected, we can serve them in ways they want to be served.”
RA: And it comes with none of the capital infrastructure costs associated with putting satellite dishes on roofs…
SC: “In terms of a lower-cost business model, we’re absolutely in the right place. We can pull on the backbone of Sky when we need to. But generally we’re using software and service.”
RA: What does that say about the more distant future of satellite distribution versus IP? Might that balance shift much further toward IP in future?
SC: “There’s always going to be a role for satellite, just in terms of the bandwidth that can give you. HD, 3D; it’s a big part of what we do.”