Sky takes on LoveFilm and YouView with internet TV package

BSkyB is to launch an internet TV service that will open up its content to those that do not subscribe to its current pay-TV offering, taking on the likes of LoveFilm, Netflix and the soon to be launched YouView.

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The new platform will allow Sky to reach the 13 million households in the UK who do not subscribe to any pay-TV service, by offering films, and eventually entertainment programmes and sport at a more flexible price than its traditional model and without the need to sign up to a minimum contract.

It will be available in the first half of this year across a “wide range” of connected devices, including PCs, laptops, tablets, mobiles, games consoles and connected TVs.

Jeremy Darroch, Sky’s chief executive, says: “This new product launch will build on our early leadership in multi-platform distribution. It will allow us to make our expertise and investment in content and technology work even harder, extending our options for continued growth.”

The launch comes as Sky marked a slowdown in the number of households that signed up to its TV service. It added 40,000 net new customers in its second quarter, down from the 140,000 customers that signed up to Sky TV in the same period the previous year.

Marketing costs fell by 12% to £541m in the six months to 31 December as it scaled back acquisition activity in favour of retention. Above the line advertising costs were reduced by £10m year on year and Sky says it also achieved the “expected savings” by closing its customer magazine.

Sky’s underlying profits grew 16% to £601m – a record in the six month period – as the company continued to grow its broadband and telephony additions. Revenue was up 6% to £3.4bn in the period.

In the year ahead, Sky says it aims to bring more “high quality” content to Sky customers, including a new channel dedicated to Formula 1, a social TV offering and VOD content from the BBC iPlayer and ITV Player.

Sky also says it aims to create more than 1,300 jobs across the UK and Ireland over the next two years as it looks to bring more of its customer service staff in-house and open up a new service centre in Dublin.

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