It was just 3 or 4 weeks ago that we said, “In Europe, Sky is perhaps the only operator Netflix will never succeed in partnering,” and here we are with Sky making the announcement this week about its new partnership.
Don’t take this as an example of how wrong Faultline can be, but as proof that in the era of OTT, a month is a long time in TV.
Sky has shown over the years a genuine resistance to onboarding anything alien onto its set tops, but just a few days ago it relented citing a deal with Spotify which is due to go live in the Spring, and now group CEO Jeremy Darroch is talking about how excited he is about a Netflix deal.
It speaks to what we have known for some time, that pay TV operators experience churn when customers have to unplug one box from their TV and plug in another, in order to get all the video experiences they want. It has always been the best thing to co-operate with companies like Netflix and bring the experience as close to the pay TV experience as possible.
Virgin Media in the UK was probably the first operator globally to push this idea, Netflix is just like any other channel, let it on the platform. All the French operators followed suit almost immediately and despite Liberty Global in Europe building its own MyPrime SVoD and offering a strong TV Everywhere solution in Horizon Go, it has ended up doing a European wide deal for Netflix collaboration, almost certainly learning from that early Virgin experience that there is nothing to fear. Now Sky says it will follow suit and this is almost certainly coming from the competitive pressure from Virgin in the UK.
Sky will then introduce it to its other DTH territories Germany and Austria as well as Italy. There is no word about its brand new OTT operations in Switzerland and Spain, but Netflix there too is likely.
Sky stood out as a company that has made a lot of friends (and customers) with its own competitive SVoD service Now TV in the UK, also offered in Germany and Italy, but essentially it offered a much smaller selection of much newer movies than Netflix had. As Netflix has strengthened its original production roster of content, its service has looked increasingly different from Sky and Now TV – so that both services can thrive in the same households. As a result Now TV will also allow Netflix to be added to it. Now TV uses a Roku box, but the ability to load other apps was disabled, and now it will selectively allow Sky approved apps.
Both of the new services are being used as pressure to shift people onto the Sky Q set top box, which has WiFi mesh connectivity, with alternative backhaul over powerline, copes with UHD content, offers Kids mode and voice TV remote. Anyone with a Sky Q box can upgrade to take on Spotify and Netflix, including existing subscriptions and the voice search will automatically upgrade to include Netflix content in the video results from voice searches.