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Now TV to break US next year, signaling X1-Sky Q union

The stars aligned late last week when Comcast etched out its long-term video strategy for Sky, as it prepares to take the UK operator’s OTT video service Now TV global by 2020. So, with Now TV set to debut in the US, what are the potential ramifications for the soon-to-launch NBCUniversal streaming offering and does the attention on Now TV imply Comcast is backing off Hulu?

Given Hulu’s more than disconcerting financials, as revealed by Disney last week, no one could really blame Comcast for potentially wanting to distance itself and now it is clearly putting eggs in various baskets as insurance policies.

Comcast SVP and CEO of NBCUniversal Steve Burke revealed some significant points during a call last Friday, saying that Now TV, which is currently an ad-free subscription service, will come with a small amount of advertising. It will be offered free to all Comcast and Sky subscribers upon launch next year and available to non-subscribers for a fee. It will mean Comcast exporting its X1 platform and voice functionality over to Europe, likely converging this with the revered Sky Q technology. A rebranding is also probable.

“The servers will have a very light ad load of targetable ads. And we know there’s a huge demand for digital advertising, interactive digital advertising. In fact, we were constantly trying to find more ad inventory because advertisers want to be in very, very good professionally produced content. So, our idea to enter the business is to leverage Sky’s technology, it’s called Now TV in Europe and also parts of what we’ve been doing at NBC and Comcast Cable. We think this approach has a much better chance to get scale quickly. There’s nothing better than free for consumers and we have enough product that consumers are currently viewing on other platforms online for free and charge that we think putting it all together in one place very, very good technology and then leveraging our relationship with Comcast Cable and Sky. There are a lot of approaches to get into the market and we think this one is attractive to consumers,” said Burke.

Launched in 2012, Now TV is currently available on over 60 devices including iOS, Android, smart TVs, Apple TV, games consoles, PCs, and the dedicated Now TV streaming device (Roku), costing £15 ($19.70) upfront. The Entertainment Pass costs £6.99 ($9.20) a month, Cinema £9.99 ($13.16) a month, and the Sky Sports passes cost £6.99 for a day, £10.99 for a week, or £33.99 ($44.77) for a month.

Significantly, Sky has the advantage of selling hardware with its Roku-powered devices, plus a heap of sports content and most importantly it can sell this all with a broadband subscription – with intelligent WiFi powered by Turkey’s AirTies.

“One of the good things about what’s going on right now in the television business is people are watching professionally produced content at higher levels than ever, we’re just not monetizing as well online as we should. And so what we’ve come up with is we’re taking some of the most popular shows on television that we produce and we’re going to offer them for free to 80% of the people in the US who are multi-channel customers, for free to Sky customers in Europe, and also to people who are not part of the ecosystem, at a fee that would be comparable to other people in the SVoD business,” continued Burke.

“We also think financially it’s more attractive because you get scale more quickly and we think it’s highly likely that will reduce the amount of investment we need to make coming into the business and also accelerate our ability to get to breakeven. We’re spending a lot of time right now developing the technology, getting the management team in place so that we can get going soon enough.”

So, while Comcast’s planned NBCUniversal streaming service, also set to launch in 2020, is positioned as a protector of cable TV cord cutting, in the sense that it will come tacked to a Comcast pay TV subscription, as well as being available to subscribers of rival offerings, the new Now TV looks like a broadband-boosting video offering. This would align nicely with Sky’s major reconstruction plans to phase out its traditional satellite TV business and go broadband-only in video. The confusion is that the as-yet-unnamed service from NBCUniversal also plans to launch outside of the US, while content from NBCUniversal is being spoken about as a key element for Now TV’s expansion efforts.

Clearly there is plenty of overlap, but the wealth of choice here should put Comcast in good stead, in theory, although it may find a lack of disparity confuses consumers – although surely Comcast will address this closer to the time as plans fall into place.

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