In recent weeks pay TV providers Sky and Virgin Media have both responded to the launch of YouView.
Sky
When YouView was still Project Canvass Sky and Virgin Media were both unhappy with the prospect of a free to air, smart TV platform muscling in on their turf – a potted history of the spat can be found here – but somewhere along the way Sky had a change of heart.
While it’s Now TV service wasn’t designed specifically for YouView, Sky’s decision to bring it to the platform significantly enhances the newcomers’ appeal.
Now TV has said it’ll add sports and TV content to the service later this year, paving the way for YouView homes to potentially get access to Sky Atlantic shows before Virgin Media’s customer do.
And by being on the platform early Sky ensures it wins the minds (and cash) of early adopters before the likes of Netflix and LOVEFiLM potentially appear on the scene.
Virgin Media
Virgin Media’s approach has been very different. Unlike Sky, the cable company doesn’t own any channels it can retail on YouView. Those it did have were sold to Sky and the company also sold its share of the UKTV business it co-owned with BBC Worldwide.
Its response to YouView is built around the TiVo, the platform it brought over from the US. Like marmite, you either love TiVo or loathe it and when we reviewed it last year we found it lacking on a number of fronts.
To counter the threat of a very TiVo-like box which works with any ISP, Virgin has introduced a new cut price package of 58 channels, broadband and home phone for £31 a month (Virgin’s headline figure of £18 doesn’t include line rental).
The problem is, the channel line-up isn’t really that great. Most are available on YouView and Freeview without cost, ten are +1 variants of channels largely covered by Virgin’s catch-up TV service and 5 are Standard Definition duplicates of the headline HD channels.
And while Virgin are offering six months half price at £9 (plus line rental), the savings are almost entirely wiped out by the £49.95 installation fee.
Virgin also highlights the option to add Sky Movies but at £26 per month just for Sky Movies 1 OR Sky Movies 2 you’d be paying £11 more than Now TV wants for its Sky Movies Pass.
Conclusions
On the TV side it’s hard to see Virgin Media as anything more than a reseller of other people’s channels and technology and that seems to have hampered how it responds to YouView.
Absent any channels to sell, it’s been forced to undercut its own pay TV offering with a cheaper subscription tier and hope it won’t really be enough to fulfil customers needs so that they eventually upgrade.
Sky on the other hand has managed to embrace the new platform as a way of making money without the usual overheads of installations and subsidising boxes. Its approach signifies an acceptance that many people don’t want to be tied into a long term contract or simply don’t watch enough TV to justify one.
For Sky YouView represents a chance to earn money from those who have previously declined to pay while Virgin Media is left to undercut its own business in order to win and retain custom.
By any reading that’s a longterm win for Sky.
