Sky set to launch terrestrial TV service

The new service will allow customers to receive some of Sky's most popular programmes - including sports and movies - through a conventional rooftop aerial and a DTT box for a monthly subscription.

The line-up of channels on the new terrestrial service will offer a range of content including sports, movies, entertainment and news. Interestingly the sports service will include live coverage from the Barclays Premiership - probably the most compelling reason at the moment to purchase a Sky dish, but Setanta have recently announced details of terrestrial Premiership action via Freeview and top-up TV, which may allow Sky to broadcast via terrestrial without shareholders believing they have lost Sky's main competitive advantage - as this has already been reduced signifcantly by Setanta.

This new foray into terrestrial TV will make use of existing capacity that Sky currently uses to broadcast Sky Three, Sky News and Sky Sports News on the Freeview DTT service. As a result, these channels will cease to be available free-to-air via DTT in advance of the launch of the pay-TV service.

More interesting is that Sky plans to broadcast its pay-TV channels on DTT using the more efficient MPEG4 as opposed to MPEG2 used on Freeview, enabling Sky to offer four video streams in place of the three Sky channels currently available - and with 'further improvements' expected in the future. The pay-TV service will use the highly secure conditional access (CA) system similar to the one that is in use for Sky's current digital satellite television system.

To access the service, customers will need to buy a new set-top box (STB) that includes the relevant CA software and MPEG4 decoder.

Presumably if Sky are only launching with four channels, the STB will also incorporate traditional MPEG2 decoding to view current Freeview channels - people aren't going to purchase another box that only allows four channels of premium content. This would be similar in guise to the recently launched BT Vision which allows downloadable content from BT plus standard Freeview channels.

Now, if Sky are releasing an STB that allows Freeview channels, Premiership football, decent Sky One programming, and up-to-date movies, without the need for a dish, and much better than the mediocre top-up-tv currently on Freeview, people are going to buy the Sky-backed STB, especially if isn't necessary to buy the subscription.

Its also highly likely Sky will also add a similar video-on-demand service that will be strongly coupled to the new Sky broadband provision, again adding incentive to purchase a Sky-branded STB as opposed to a bog-standard Freeview box.

Inevitably it's conceivable that Sky could not only be the only satellite service in the UK, but the main dominant player in the DTT pay-tv spectrum.

Obviously this is all conditional to Ofcom allowing the service to go ahead. It should be interesting to see whether Sky are allowed to further segment and dominate the market.

Full details, including branding, pricing and the complete channel line-up, will be revealed by Sky closer to launch. You can read Sky's press release here. µ

See also
Sky broadband update
Sky broadband brings ADSL2+ to the masses
Sky will be a broadband heavyweight
Sky launches cheapo broadband service