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Sky unveils plans for Plus



Sky unveils plans for Plus

BSkyB has big plans for its Sky Plus personal video recorder, including converting the set-top box into a virtual video jukebox, offering a library of pay-per-view films.
It plans a big marketing push in the spring and has high hopes the Sky Plus box will ultimately be seen as the video equivalent of Apple's iPod, the mobile-phone sized personal stereo that can store thousands of music tracks.

Sky is already working on the new generation of portable video devices executives believe will be a big hit with teenagers who want to download the latest movie and watch it at a friend's house.

Brian Sullivan, the company's director of new product development and sales, has unveiled a vision of the future where Sky Plus will become ever more important in expanding Sky's range of channels and services.

Sky sees the technology, which allows viewers to pause and rewind live TV as well as record shows to a built-in hard drive, as vital in increasing customer loyalty and driving up the revenue it receives from each subscriber.

As the technology becomes more prevalent, Mr Sullivan said BSkyB would start to introduce new services that would take advantage of the hard disk capacity inside the box. These could include deals with music channels and record labels to allow subscribers to download songs directly to the box.

It is also hoping the new generation of Sky Plus boxes will have five in-built tuners, allowing viewers to watch TV and record four separate channels simultaneously.

And Sky's product development team is also working on technology that would allow subscribers with the new breed of portable video players, such as the Archos AV320, to download shows they had recorded onto their Sky Plus box directly to the player in order to view shows on the move.

Video version of the iPod

With portable digital music players such as the iPod becoming mass market items, many technology analysts believe that hard disk portable video recorders capable of storing hours of shows and films at high quality will become the next major growth area. Apple is already believed to be working on a video version of the iPod.

"It would easy to download music tracks onto a PVR and content that you can output to a portable device. It's one of the uses we're going to be looking at going forward," said Mr Sullivan.

While traditional video on demand services from cable operators had failed because they had not captured the imagination of viewers, Mr Sullivan predicted that they would be more interested in "managed choice".

For example, the week's top 10 films could all be downloaded to the set-top box, with viewers deciding whether and when they wanted to watch them, he said. The new technology would also be used to produce more compelling and effective interactive advertising, he added.

Mr Sullivan said new audience research into the use of Sky Plus showed satisfaction rates of close to 100%, and revealed subscribers were watching 29 hours of television a week compared to 25 hours a week before they got the box.

"They're watching more movies, more sport, more basic tier channels and a bit less of the terrestrial channel's offerings," he said.

Sky Plus won't replace live TV

The research also disproved the theory that people would stop watching live television, he said. Sky's research shows that Sky Plus viewers still flick through the schedule first before deciding to watch something they have saved to the box - and 60% of their viewing is still of live shows.

Former Sky chief executive Tony Ball has bequeathed his successor James Murdoch a target of making £400 from each subscriber by the end of the next year. At the end of 2003, the total stood at £369 a year.

Mr Murdoch sees persuading customers to upgrade to Sky Plus, and at the same time moving their original set-top box to elsewhere in the home with a £15 a month second subscription, as a key plank in this strategy.

Given his relative youth and previous experience overseeing News Corporation's new media operations, Mr Murdoch is known to be a keen advocate of new technology. On taking the job last year, he stressed the importance of continuing to innovate technologically and keep subscribers interested.

"This company has really been at the forefront of innovation when it comes to television technology and what you can do with it," he told the Guardian. "It's very important to continue and nurture that spirit of innovation and get really, really good products into our customers' hands."

Backed by a lavish £20m marketing push last autumn, Sky dropped the price of the box from £300 to £199 and scrapped the £10 monthly subscription for customers paying for premium channels.

The price cut and marketing drive had the desired effect, doubling the number of Sky Plus subscribers to 250,000 by the end of the year.