The announcement of the deal comes just days before the biggest threat to Sky’s dominance of the sports TV market – BT Sport – launches for the first time. It is understood the deal has taken a year to develop and is an extension of an earlier partnership between the two to promote the launch of 3D TV.
Owners of LG’s 2012 and 2013 range of TVs, Blu-ray players and home cinema systems will be able to access the Now TV app, which offers pay as you go access to Sky Sports and monthly access to Sky Movies, from their Smart User Interface home screens.
LG will launch the service with an introductory 30-day free trial Sky Movies Pass offer for new customers, which will then move to a £8.99 per month for the next three months thereafter. Sky Sports on Now TV will continue to be charged at the market rate of £9.99 for a 24-hour access pass.
The launch will be supported with a joint £5m marketing campaign ahead of the opening game of the Premier League that will appear on TV, print, digital, in-store and through PR activity, all carrying the strapline: “Now, that’s smart”. More than 1,000 retail stores will also have dedicated staff to demo the new technology.
The exclusive partnership is expected to last “for at least a year” and could possibly extend to other devices beyond TV, according to Andy Mackay, UK commercial director for home appliances and home entertainment.
He told Marketing Week Now TV offers LG a chance to leverage its “position of strength” in TV, where it has about a 20 per cent share of the market and is the “strong number two” in the UK. Despite this position, profit in its global TV business fell 82 per cent to 29.8bn Won in its first quarter as it was forced to cut prices sharply amid rising competition from rivals.
Mackay said internal research shows consumers looking to buy a Smart TV would be prepared pay a premium to receive Sky broadcasting without the need to sign up to a contract and he expects the launch to help LG continue its pace as the fastest-growing brand in the TV market – particularly in the crucial third and fourth quarters.
Sky reports its full-year results tomorrow (26 July) where it is likely to issue a trading update on Now TV’s progress. In the last quarterly earnings, Sky said Now TV helped the company to add 30,000 TV additions, made up of both Now TV-only and core Sky TV customers.
Rival BT, which announced its full year results today (25 July), revealed it has already signed up 500,000 households to BT Sport, mostly existing customers who have re-contracted their broadband to receive the free service. It expects to see the proportion of new customers increase once the channel launches on 1 August.