Sky to Launch New Internet Service

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Sky, the first UK broadcaster to offer content that could be downloaded over the internet, is now set to launch a new internet-based TV in the first half of this year. In what is likely to be an attempt to combat Netflix and Lovefilm, Sky's new service will not require a minimum contract. Instead, customers can rent single movies on a pay-as-you-go basis. They can also avail of a monthly subscription for unlimited access to Sky movies, and later on have access to sports and other entertainment as well. Available on laptops, tablets, mobile phones, connected TVs, and game consoles, it's a great additional option for those who don't have pay TV.

This offer has caused analysts to fear cannibalising of Sky's services, to which Sky's chief executive, Jeremy Darroch, said: “We’re very tuned to the risks of canibalisation and there are many ways we can differentiate the service. Customers really like the satellite service, they get good value from it and want to get more from it, so this isn’t being started with any concerns about satellite.”

Alongside this new offer, Sky's original internet offer, SkyGo will now have SkyArts 1, SkyLiving, SkyOne, SkySports F1, and Sky Atlantic. A new Android app for SkyGo is also going to be brought to Samsung and HTC smartphones. Sky also plans on unveiling a new public Wifi service powered by The Cloud, as well as adding 1million homes to their broadband network by 2013. Most of these homes will served by a new fibre service of 40 Mbps.

The company recently reported that profits are up to £597m, revenue is also up to £3.4bn, and they added 40,000 new customers in the last three months of 2011, up from 26,000 in the first quarter. Despite the rise between quarters, this was below analyst expectations, and some theorize it's due to the fact that customers are taking telephony and broadband services alongside their TV subscriptions.

Darroch predicts that 2012 will be a tough year, but that they will manage “ any short-term headwinds as they emerge”.