Rupert Murdochs long-held masterplan for a pan-European pay-TV business is as much a shrewd technology play as it is a business one and could accelerate Ultra HD TV rollout in key markets.
Taking control of Sky Deutschland and Sky Italia would represent the biggest shakeup for BSkyB since it was created a quarter of century ago when Murdochs Sky merged with British Satellite Broadcasting.
The deal being tabled would give the satellite broadcaster around 20 million additional paying customers in Germany and Italy plus, of course, the potential of tapping millions of people in those countries who are not yet Sky subscribers.
There are many reasons why the move makes sense, chief among them is the scale and efficiency a multinational operation would bring.
BSkyB has prided itself on being a technological pioneer, successfully diversifying its reach into home phone, broadband and internet-based on-demand services (like NOW TV) to counter saturation of its core domestic TV base.
It is significantly ahead of its counterparts on the continent in this regard, but that fact leaves Sky Deutschland and Sky Italias markets ripe for exploitation powered by shared BSkyB tech resources.
These include targeted advertising platform Adsmart, the Sky Go mobile application, and a next-generation set top box.
New chipsets capable of processing a 4K signal are essential for pay TV provider moves into Ultra HD. According to the Telegraph Skys in-development STB, going under the name Project 2016, will house this.
BSkyB itself is tight-lipped about an Ultra HD service launch but acknowledges testing the technology and keeping a watching brief on consumer hardware sales.
Sky Deutschland on the other hand has been more vocal, demonstrating how Ultra HD might look on large screens of 55-85 inches and how a new user interface might enhance the overall experience.
Like many in the industry, including public broadcaster body the EBU, Sky Deutschland believes that UHD launch timing is best governed by the availability of a production and display format enhanced by higher dynamic range and higher frame rates, not defined by resolution alone.
The Project 2016 team is also looking to overhaul the way that Sky delivers its content by placing control of VOD streams within the network, according to The Telegraph. This would enable programmes to be recorded in the cloud and accessed by users from anywhere, on any device, even while outside the home.
The scale of Sky Europe would also enable it to compete better with existing pan-European players such as Liberty Global (which owns Unitymedia in Germany, acquired the UKs Virgin Media for $24bn and is the new co-owner of independent production powerhouse All3Media with Discovery Communications) and Vodafone (which acquired Kabel Deutschland for $10bn and has also been linked with a merger with BSkyB).
It would also give BSkyB greater negotiating clout over prime sports and movie rights as it seeks to fight off telco and internet competition (ie. BT, Google, Netflix and Amazon). Some analysts believe bidding for future tranches of premium content may soon be opened up beyond national borders.
The Sky deal is being brokered through 21st Century Fox which owns 39% in BSkyB. Fox owns Sky Italia and has a 57.4% interest in Sky Deutschland and will transfer both to BSkyB in exchange for $9.3bn.
James Murdoch, Co-Chief Operating Officer at 21st Century Fox said. "Ultimately, a pan-European Sky is good for customers, who will benefit from the accelerated technological innovation and enhanced customer experience made possible by a fully integrated business.
Decision makers across the media world will look to IBC in September for informed analysis and debate about this significant remodelling of Europes TV landscape.
Speaking at the IBC Leaders' Summit is Balan Nair, Executive Vice President and Chief Technology Officer, Liberty Global; speaking at the IBC Conference are Colin McQuade, CIO, BSkyB and, in interview with Andrew Neil, David Abraham, CEO, Channel 4 will be assessing the health of broadcast TV on Thursday 11 September in the Forum.
Don't miss these inspiring figures provide their vision of the future of broadcasting. You can view the full IBC2014 Conference Programme here, and if you book your pass before 21 August, you save up to 700.
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Rupert Murdochs long-held masterplan for a pan-European pay-TV business is as much a shrewd technology play as it is a business one and could accelerate Ultra HD TV rollout in key markets.
