Sky aims at Netflix in Switzerland with SVoD service

Sky’s invasion of the Swiss pay TV market now looks complete with the launch of its Sky Show streaming SVoD service pitched directly against Netflix. It is a rare case of a legacy pay TV operator coming at Netflix in a new territory by competing using OTT only.

Sky has no DTH service in Switzerland, although some of its channels are available as subscription options over IPTV or cable through Teleclub, the pay TV subsidiary of incumbent telco Swisscom, as well as in packages delivered to Sky-branded set tops or CI Plus modules. None of these include on-demand content via services such as Sky Go or Sky Select, since Sky does not own the appropriate rights there.

Costing CHF14.90 ($15.84) per month with no contract and provided by the operator’s German arm Sky Deutschland, it includes 2,000 episodes of TV series, 1,000 animated series episodes and 500 movies or documentaries including productions by HBO and Showtime as well as all Sky Originals. The titles are available in the original language and dubbed in the German version.

With 5 million of the country’s 8.3 million people speaking German as a first language they have been the biggest target for incoming operators, with Netflix entering in September 2014, while Liberty Global’s cable operator UPC Switzerland has been there since 1994.

Sky Deutschland prepared the ground for the Sky Show launch in May 2017 with the acquisition of Swiss online-video distributor Homedia, operating under the HollyStar brand. This had been launched as a DVD rental service DVDfly in 2004 and now offers access to over 10,000 movies and TV shows on a separate subscription, rental and EST (Electronic Sell Through) basis. As well as being available as a standalone app on PCs, smart TVs, games consoles, iOS and Android devices, HollyStar is distributed via pay TV services, including IPTV platform Sunrise.

This signaled Sky’s intent to be a major player in the Swiss TV market, with plans to incorporate Hollystar into its own brand. This played to Sky’s proven ability to sell content in Europe’s other two German speaking countries, Austria and Germany itself.

Sky then followed up by launching an OTT live sports service in August 2017, offering a strong lineup of German Bundesliga, UEFA Champions League, UEFA Europa League, DFB Cup, tennis, Formula 1, ice-hockey, golf and handball, which is very popular in central Europe. Sky released apps for smart TV sets and Apple TV, while negotiating to make it available on the TV platforms of Swiss UPC, Swisscom and Sunrise. It costs CHF19.90 ($21.15) per month, or CHF9.90 for the day pass Sky now offers in all its markets. This might sound expensive but not compared with UPC’s MySports Pro premium package launched about the same time, which costs CHF 25 per month for a similar range of content.

However this is distributed on Swiss cable networks to compete with Swisscom’s IPTV platform. It is not therefore in competition with Sky, which in fact granted UPC Switzerland the rights to its Bundesliga football coverage for the latter’s MySports service. Under the deal all Bundesliga matches to which Sky Deutschland holds the rights are shown exclusively on MySports in Switzerland via cable and IPTV. This allows UPC Switzerland to show 266 Bundesliga matches and strengthens its hand in the increasingly intense competition with Swisscom in the primary pay TV arena. Swisscom in turn had done a deal with Discovery to air the Bundesliga matches for which Discovery holds the rights on its Eurosport channels.

Swisscom TV gained 76,000 subs in 2017, or 5.5%, to reach 1.45 million, while Liberty Global stands at 1.2 million video customers. Recently Liberty Global sold its Austrian subsidiary UPC Austria for €1.9 billion in December 2018, suggesting that a similar move might follow in Switzerland. However that would only be likely we suspect as a deck clearing exercise in preparation for a sale of at least some Liberty Global European assets to Vodafone.