UK Media Remains the One to Watch

The main players in the hotly contested UK media scene continue to roll the dice. Sky s inevitable move into UHD this summer is almost a sideshow compared to the emphasis the company has put on mobile and streaming services and technologies. In its most significant revamp in a decade the broadcaster is unleashing a number of products and initiatives to combat the OTT threat from Amazon and Netflix and to ward off UK pay-TV rivals BT Group and Virgin Media.

Chiefly, they include Sky Q, the much anticipated new set top box which (in its premium Silver version) permits users to watch TV on multiple screens around the home and on two tablets at the same time. Sky calls it Fluid Viewing and will be augmented later this year with the ability to watch recorded or live shows synced to a mobile device outside the home.

This has necessitated the renegotiation by Sky of contracts with its major rights holders including with HBO and Showtime in a new multi-year deal for license to its entire content library exclusively across Sky s territories, in UK, Germany, Austria and Italy. As important, it means Amazon and Netflix can t get access to programming like the new Twin Peaks series. That feat was only possible because of Sky's scale and continuing growth claimed Sky s Chief Strategy Officer, Mai Fyfield, in The Telegraph. However, agreement has not been reached with Sky s main content partner, the BBC.

Unlike Virgin Media and BT, Sky has declined to give Netflix a place on its platform.

Other new Sky products include an upgraded Now TV service, coming later this year, as a means of offering a selection of Sky s programming to consumers who don t want a pay TV subscription. Fyfield suggests that offering entry level packages to Sky entertainment has helped the broadcast grow its customers over the past year (adding 205,000 in the 6 months to December 2015), in contrast to the heavyweight subs demanded by pay TV operators in the US which have faced a year of continued cord cutting.

This year, possibly as early as the spring, Sky will launch a mobile service carried over the O2 UK network. This will give it the quad play of home phone, mobile, TV and broadband services for bundling into a single package (Sky already has an on demand mobile TV service, Sky Go, with more than 6 million customers).

Doing this will pitch Sky head to head in the UK market with the existing quad play of Virgin Media, and Talk Talk and now BT Group, following its acquisition of mobile services operator EE for £12.5 billion from Deutsche Telekom and Orange.

While the BT/EE move reduces the number of mobile players in the UK to five, a mooted takeover by CK Hutchison s Three of Telefonica s O2 UK could see the market cut further.

The £10.25 billion ( 13.5 billion) bid is opposed by British regulator Ofcom, which argues that four rival mobile operators are required to protect consumers. It is urging European authorities to block it.

BT meanwhile announced it had netted 97,000 new customers to its BT Sport service pulled in by exclusive Champions League games although it will take a long time for its 1.4 million total subscribers to compete with anything like that of Sky s 12.3 million UK retail customers (Sky also has over 4 million in both Germany and Italy).

Further good news for BT was its award of a £100 million seven year deal to provide the BBC with broadband infrastructure. Operated by BT's global media services operation, BT Media and Broadcast, the network will link all the BBC's UK sites, including 21 broadcast centres and local radio stations, and carry its entire video, audio, data, telephone and broadband services.

The BBC says that the technology will have the capacity to allow it to more easily trial UHD and 360-degree video. Meanwhile, BT and Sky continue to trial virtual reality, with BT trialling an immersive experience at the NBA Global Games at the O2 arena in January with further VR tests planned.

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