UPDATE Vodafone Moot Sky’s NOW TV with their UK Home Broadband

In another entirely unsurprising development it’s been reported that Vodafone are seeking to enhance and possibly extend their existing relationship with BSkyB (Sky Broadband) by potentially bundling Sky’s NOW TV streaming service alongside their forthcoming Home Broadband product, which is anticipated to surface during spring 2015.

Last week’s big news that Vodafone were to have a second stab at breaking into the United Kingdom’s consumer home broadband market didn’t come as much of a surprise (here), not least since the operator had been signalling as much since the end of 2013. The fact that their related TV product may, at least in part, be based off content supplied by Sky is also equally unsurprising.

Sky already supplies plenty of premium TV content to Vodafone’s data focused mobile (4G) customers and related subscribers recently got access to the NOW TV platform (here), which is Sky’s semi-separate broadband and web-based video streaming (IPTV) service that also carries access to their premium live TV entertainment channels (inc. sport and movies). Adding NOW TV to Vodafone’s Home Broadband is a logical choice.

According to The Telegraph, the talks between Vodafone and Sky are said to be at an “early stage” (odd for a service that’s due to go live in just a few months’ time) and bundling NOW TV into the mix is apparently just one of several options being discussed as part of the on-going alliance against BT.

A Sky Spokesman said:

“Our strategy with Now TV is to be as broadly distributed as possible and that means talking to lots of people.”

No doubt Vodafone would also want NOW TV to be branded around its own products and they’re hopefully seeking to do something a bit different with it because NOW TV is already sold separately (inc. via YouView and various other devices) and, by itself, remains reasonably well priced.

In other words, offering NOW TV alone wouldn’t be competitive enough versus the more sophisticated YouView (IPTV) set-top-boxes from TalkTalk and BT (lest we not forget Virgin Media’s TiVo and Sky’s own kit). On the other hand Vodafone only has a few months to sort something out and so this may be their only option to meet the initial launch.

On the flip side it’s widely expected that Sky will, in the near future, add their own mobile service and we’d be very surprised if anybody other than Vodafone was picked to supply the necessary Mobile Virtual Network Operator (MVNO) side.

The danger in all this is that Vodafone risks launching an inferior Home Broadband and TV bundle an already saturated market, where the usual dynamics of consumer choice are already well catered for by the existing players. Breaking into that segment without anything truly unique or different to offer won’t be an easy task, especially as they intend to utilise their existing unbundled (LLU) network that lacks the coverage of Sky Broadband and TalkTalk’s rival platforms.

UPDATE 1st December 2014

As per the above article, which references how the operator is also looking at other IPTV solutions, Vodafone has now been spotted sniffing around Tesco’s BlinkBox video streaming service. But much like the NOW TV discussions it’s understood, according to City AM, that Vodafone are “nowhere near final terms on a deal” and the talks are described as being very tentative and “early“.

BlinkBox lost £18.5m last year and so it would be an easy buy, although we can’t shake the feeling that this might not be the best approach for Vodafone’s re-entry into the home broadband market.