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19 December 2019

Sky’s Britbox snub potentially due to BT investment interest

Why would a UK-based pay TV operator with a serious OTT video business of its own willingly embrace distribution and set top integration deals with US SVoD heavyweights, only to turn its nose up at an approach by a homegrown streaming service with a more than credible resume?


That is the burning question following reports this week that Sky has gone off the idea of a distribution deal with Britbox, the joint video streaming venture from broadcasters the BBC and ITV. Sky’s reasoning, according to the Sunday Times, boils down to Britbox not offering any significant additional value to its subscriber base.


But what about all this talk about pay TV operators evolving into super aggregators? Doesn’t Sky strive to be the super aggregator to end all super aggregators? Not much is certain in this whirlwind industry, except that Sky does not follow the rulebook.


It was some 22 months ago that Sky shocked the industry by integrating Netflix onto its Sky Q set tops. Nothing groundbreaking in itself with rival Virgin Media setting the trend way back in 2013, except that prior to this deal Sky showed genuine resistance to onboarding anything alien onto its set top environment. Sky pay TV subscribers can already access BBC iPlayer and Sky also inked a major deal with BBC Studios earlier this year – so clearly Sky’s beef is with ITV?


Unfortunately, it’s not quite that simple. One major contributor to pay TV churn is subscribers having to switch devices to access a different platform, for example switching HDMI inputs from a Sky Q set top to a Chromecast dongle because you want to stream something on Britbox. ITV doesn’t have the global reputation of the BBC and in reality Britbox is merely a side hustle for the BBC.


The realization that partnering with the streaming big boys was more beneficial than battling them (like Liberty Global attempted with its MyPrime SVoD service) triggered a cascade of integration deals in recent years, most recently with Prime Video and now Disney+ following suit.


A Sky spokesperson commented, “We’ll continue to discuss new partnerships with a range of content providers, but we remain disciplined in investing in those new partnerships where they clearly deliver additional value to our customers.”


Britbox has already secured deals with mobile operator EE, which offers the EE TV service (until March 2021), as well as Samsung, Freeview and YouView. Fellow British broadcaster Channel 4 also recently signed up, giving subscribers access to titles from the UK’s big 3 in one place for the first time, at just £5.99 ($7.70) a month in an ad-free subscription.


We can almost understand Sky’s logic. Pay TV customers already have access to all the best BBC content for free, so Britbox’s appeal really is questionable.


What isn’t questionable is the experience of Britbox’s vendor stack. Putting its acquisition of UK multiscreen firm Massive Interactive front and center, Italy’s Deltatre has designed the full user experience and multi-platform apps for the UK service, just as it did for Britbox in the US and Canada. The UX management platform Axis is purpose-built for personalizing the TV editorial process, ironing out marketing tasks such as sending out product promotions and special offers – using deep learning techniques from recommendation engine big hitter ThinkAnalytics to understand user behavior.


Elsewhere, Dutch security specialist Irdeto is handling content packaging and protection for Britbox, delivered over an Akamai CDN with a customer identity and access management platform from LoginRadius. Program management is being headed up by consultancy firm Balance Agent, while Teleperformance is overseeing customer services. Media strategy responsibility falls to Total Media, a behavioral planning agency, while ITV’s own Creative division will manage branding and advertising campaigns.


Deltatre recently told Faultline, “It’s not the end of the relationship, and we’ll be working with BritBox in the months and years ahead,” although the company was not at liberty to elaborate on any future plans.


It’s worth noting that BT was recently rumored to be investing in Bribox, which may be the real reason behind Sky’s spurning of the service.