You will soon be able to receive Sky’s NOW TV ‘Pay Lite’ service using an HDMI streaming stick, with the service provider claiming it will be the cheapest device of its kind in the UK, at £14.99. Despite the low price, the Roku-powered ‘NOW TV Smart Stick’ comes with voice search via the remote control. Viewers can also pause live TV on all NOW TV’s premium channels including Sky Sports, FOX, Comedy Central and Sky Atlantic, in an important advance for the user experience.
NOW TV has also announced that it will enable downloads to mobile devices (via the NOW TV app), covering its kids, entertainment and cinema bundles (which NOW TV calls ‘passes’). The phased deployment starts this spring with the Kids Pass. By the end of the year, full HD streaming will be available for both live and on-demand, covering content from the likes of Sky Atlantic, Sky One and Sky Sports.
Gidon Katz, Managing Director at NOW TV, says: “If you are looking for a flexible way to stream great TV, contract-free, our plug-and-play NOW TV Smart Stick is the cheapest in the UK.”
Paolo Pescatore, VP Multiplay and Media at CCS Insight, reckons this represents a way for Sky to gain new audiences and increase revenue. “The NOW TV streaming stick is big news. Sky is looking to jump on the bandwagon of this segment given the popularity of these small form factor devices,” he says. “People will be blown away with the price as well as the stick-plus-pass bundles. And let’s not forget the slew of new features, which in our opinion will strongly resonate with users, such as voice control, pause live TV and full HD for the first time on a NOW TV product.”
As ever, cannibalisation is a concern when a Pay TV operator offers a good Pay Lite service. “The company will be faced with some tough decisions of how it manages both the Sky Q and NOW TV brands,” says Pescatore. “Yes, they cater for different segments, but it needs to ensure that NOW TV does not cannibalise its premium base. Effectively, consumers can sign up to more or less the same content for less money with NOW TV.”
This confirms Sky’s determination to ‘win’ the market for lower-cost premium subscription TV in the UK. We attended an analyst briefing several years ago, not long after NOW TV had launched, where it was suggested that to avoid cannibalising their classic Pay TV bouquets, operators needed to avoid HD. That line was crossed some time ago. It has also been suggested that DVR-type functionality is a key ‘line’ after which the Pay Lite services could become so attractive that subscribers drop out of full-flavour Pay TV. Live-pause is one of the most popular of all DVR features. Nevertheless, Sky continues to upgrade the user experience on NOW TV, no doubt mindful of what Netflix and Amazon want to offer – in terms of content – at the low-cost end of the pay market.
Sky is slowly lowering the barriers to entry for ultra-premium subscription TV. Very soon a UK consumer will be able to set-up their wide screen TV for 1,000 Sky movies, including those just coming out of cinemas, for a total of £25, if they started with no NOW TV compatible streaming devices (£15 for the streamer device, £10 for the first month of a cinema pass). Equally, if you are completely desperate to see your team in a big football match, you could install the NOW TV Smart Stick and sign-up with Sky Sports for one day for £22 (a Sky Sports day pass is £6.99). This device has the potential to increase discretionary spending on paid television and encourage growth in what is now an established and almost certainly permanent segment in the Pay TV market.
NOW TV is one of the fruits of the industrial revolution that we have witnessed in television these last ten years. New and disruptive technology has lowered the cost of distribution. Competition has increased. Incumbents had to respond. Consumers are the clear winners with more flexible subscription TV options.