Sky Q car_cropped

On Wednesday, Sky launched “Sky Q” – a new premium product focussed on flexibility and continuity (what they call “Fluid Viewing”).  If you haven’t seen it yet, you can check out my summary of the news here but today I wanted to dive a little deeper so here are my reflections on the product itself, what I think it means for Sky and for the competition.

Sky Q – a product that’s genuinely “new” and “improved”

Normally this phrase is one of my pet hates as it is basically impossible (New thing?  Fine.  Improved version of a thing?  So it’s not new then is it.)  Anyone, against all my instincts for pedantry, I’d say Sky Q qualifies.

As is traditional, the snarks on Twitter were quick to shrug their shoulders and claim that there was nothing new or interesting here.  They are patently wrong – although most of the features have never been done before in some way, the ability to download recorded Pay TV content to your tablet could be a game-changer.  It’s a massive feature for commuters, people who spend time away from home (e.g. on business), holiday makers and anyone who has to share the main TV.   Assuming this actually works for the content you want this will be a huge differentiator for Sky.

But I think it’s also also wrong to downplay the “improved” part of the equation.  As well as offering bigger hard drives, more tuners etc, where I think Sky has been really clever is in taking existing technology that geeks like me have been enjoying from multiple products and delivering them in a single, cohesive ecosystem.  People like me won’t need Powerline adaptors, wifi extenders, a SlingBox, Multiroom & Sky Go, Bluetooth speakers and a multi-room music set up.  And normal people won’t need to look up what all those are.  It’s simple, tidy and a highly compelling prospect.

What does it mean for Sky?

The biggest thing I took from Wednesday’s announcement was that, once again, Sky have shown that they “get it”.  It is still some way from hitting the mainstream but the warning signs have been there for a while – traditional linear TV watching is a dying beast.  Consumers increasingly want to decide when and where to watch their content and while Sky OnDemand and Sky Go were a great start, they were limited bolt-ons, straight-jacketed by old and disparate technology.   I’d argue that Sky were also increasingly over a barrel with content providers especially with Amazon, Netflix and BT proving strong competition.

With Sky Q,  Sky can now offer customers great technology in addition to the exclusive content that it delivers.  It positions them brilliantly for today but also for the future, regardless of where the content itself goes and how people consume it.  The indications are already there with Sky suggesting it’s open to Netflix and Amazon apps on the platform and I’d expect apps like WWE Network to follow.  A NowTV app could even fit in here well, as content becomes increasingly fractured, Sky Q becomes the one platform to deliver them all.  And if the Premier League and Champion’s League go down the route of the NFL and MLB by selling to customers directly?  Well there will be an App for that too.

Suddenly cord-cutting and unbundling is not a threat to Sky’s broadband business but an opportunity.  However, Sky Q is something bigger.  As well as attempting to keep linear TV relevant and preparing for an unbundled future, I see it as Sky’s play for control of the home.  Music and photo streaming? Check.  The best way to manage your broadband and wifi? Maybe.  Your smart home automation system sometime down the line?  Probably.  Re-branding to Skynet and destroying the world?  Let’s hope not.     

And what about the competition?

virgin and BT

Well that depends, and an important question before we get to that is just who are the competition?  Not Amazon and Netflix, at least not if the future I’ve set out above comes true.  Where some businesses would fight them, Sky have cleverly positioned them as content rather than competition.

In terms of their direct rivals, I genuinely wonder if and how Virgin Media can respond.  Having sold their only content (the sold Living to Sky, partly to get back access to Sky 1 and only for Sky to then launch Sky Atlantic) their fibre optic network and Tivo were their only differentiators.  Ironically, Tivo (particularly in the US) already offers some of the Sky Q functionality but Virgin have been unable to capitalise on it and have now lost the first-mover advantage.  Should they just ditch TV? Double down on Tivo? Partner with someone else?  I have some ideas how they can fight back but that probably deserves a post for itself.  And as for BT?  Well it’s going to be a tough fight and they won’t win it with a Walking Dead spin-off.  In my view, they need to start selling a BT Sport online/app package directly to any consumers as a stand alone product.  By all means offer it free or discounted for BT broadband customers but go after the cord-cutters, it’s a no-brainer.

However, I think the most interesting thing about yesterday’s launch is how it puts Sky up against some of technology’s biggest players.  It was a huge announcement in terms of TV but I actually see it as just as big a moment in “the battle for the living room”.  In this arena, Sky in no longer fighting Virgin and BT but Apple, Sony and Microsoft’s Xbox.  Open it up to multiroom audio and home automation and you can throw in Sonos, Samsung and even Google.  Sky Q has raised the bar for TV in the UK and positioned Sky as relevant in an unbundled, cord-free and international boundary-free future.  It’s a bold move, but they are going to have one hell of a fight.

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