Full OTT debut for Sky X – much more than a poor man’s Sky Q

Two years have flown by since Sky first etched out its satellite exodus and finally the Comcast-owned European operator has cranked up the OTT engine – by picking Austria as the test bed for its first fully OTT-delivered pay TV offering. Expect a quick expansion effort across the rest of Sky’s footprint should the first run out prove successful, although one Sky X feature in particular has already ruffled some feathers.

Called Sky X, the app is set to make quite a splash, landing on mobile devices, Samsung and LG smart TVs, PCs, and PlayStation 4 consoles. A dedicated Sky X streaming device is also a purchasable option, which looks almost identical to the Sky Q Mini set top, a hybrid device built by the in-house operation listed as BSkyB, but which was once Amstrad.

It boasts a full fat Sky line up with live channels including its trademark sports content, plus on-demand series and movies, and a host of popular broadcast channels from the likes of Disney, Discovery and NBCUniversal. It also comes with a bunch of FTA channels which might sound innocent enough, yet there are some seriously sinister undertones in play here, which we’ll touch on shortly.

All of this, without any long-term contract or fiddly installation arrangements, with the option of no additional hardware, no sneaky hidden fees and – just to top it all off – the luxury of a 14-day free trial. If Sky X isn’t destined for serious disruption, we’ll eat our hat, and better still it looks set to perfectly complement its separate Now TV streaming service.

Sky X comes in three package flavors, with options of €19.99 a month for select channels and €34.99 a month for the full package, while a €7.99 a month package is also available for FTA channels only. Yes, you read that right, a monthly fee for FTA content – which in ours and anyone else’s book stands for FREE to air. This contentious move has not only caused Sky community forums to go into meltdown, but is a move which must have Sky’s broadcast partners seething. These partners are offering ad-supported content free to the country through various service provider partners, only for Sky to decide it can instead profit directly from their content.

Surely the FTA broadcasters – namely ProSieben, ORF, Servus TV, ARD, ZDF, RTL, Sat.1, VOX, RTL II, kabel eins and Eurosport 1 – will have to respond. Is this an abuse of power, naivety on Sky’s part, or a genuine test if consumers are willing to pay a small fee just for an aerial-free TV experience?

So, the Sky X streaming set top is available at two price points of €19.99 or €49.99 up front dependent on which package is taken, targeted mainly at consumers with incompatible smart TVs, meaning Sky X is not compatible with other connected TV devices such as Google Chromecast or Amazon Fire Stick.

It recommends Sky X users have an internet connection of at least 10 Mbps for streaming content, which shouldn’t be difficult or expensive to come by. BroadbandSpeedChecker has the average download speed in Austria listed as 32.5 Mbps, topped out by local ISP Liwest Kabelmedien with an average of nearly 60 Mbps, while Tele2 comes bottom of the top 10 rankings with an average speed barely nudging 15 Mbps.

But let this not distract us from the bigger picture here. Sky X is not just a more expensive version of Now TV, nor is Sky X a poor man’s Sky Q, it represents the fundamental cannibalization of a company’s core business, which significant market changes have forced it to do.

Over two years ago, when Sky first announced its plans to take Sky Q broadband-only, we shouted from the rooftops how the move was trendsetting and fearless – a term we don’t use lightly – and still Sky remains the only obvious tier 1 pay TV operator embracing online video with such open arms. Sky of course has the resources, reach and funding to make such dramatic changes to its business model – even prior to Comcast ownership – but increasingly those operators which don’t follow suit soon do so at their own risk.