Sky launches Now TV video streaming service to battle Netflix

BRITISH SATALLITE BROADCASTER Sky has launched Now TV today, an online TV and video streaming service set to compete with Netflix and Lovefilm.

Arriving tomorrow, the service will stream Sky content such as Sky Movies to broadband connected devices and eventually expand to offer sports and entertainment. The service's interface will also include recommendations and editorial support.

Now TV will be available for £15 a month or on a "pay as you go" basis with immediate streaming with no install fees and no contract to sign.

In a statement, Sky CEO Jeremy Darroch said, "We'll offer two distinctive ways to watch: the market-leading full Sky service for the whole family, complete with the widest range of channels, high quality products like Sky+, HD and Sky Go, and the peace of mind of a monthly bill; or the flexible, more spontaneous, pay-as-you-go service of Now TV."

The move has left many wondering, "Why now?" Netflix and Lovefilm have dominated the market for some time, so it could be argued that the release is a little too late.

However, analysts at Strategy Analytics said the announcement isn't a "particularly risky move" for Sky, as "it uses the same content rights, distribution technology, sales and customer service infrastructure which underpins Sky TV and Sky Go".

"Now TV offers a way to leverage investments the group would be making anyway," Strategy Analytics said. "In framing expectations we should remember that NOW TV is entering a relatively small market by pay TV standards. In 2011 the UK OTT TV and Video market was worth less than $395m and is likely to grow around 30 per cent in 2012 to top half a billion dollars by year-end."

Although Now TV is likely to grow, Strategy Analytics said that in the overall market it will be some time before it significantly impacts Sky's overall revenues. µ