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UPD Sky Broadband Top 6.1Mill Subs and Pushes Sky Q TV via the Internet

Thursday, January 26th, 2017 (7:58 am) - Score 3,472

Sky has today published their latest results to 31st December 2016, which reveals that in the last six months they’ve added +140,000 new Sky Broadband subscribers in the UK and Ireland to total 6.1 million (up from +70K added in H1 2016). Plus you’ll soon be able to get Sky Q TV via broadband.

Over the past few months Sky has experienced a number of big developments. The first was the long-awaited launch of their new O2 based Sky Mobile service (here), which has turned the operator into a quad-play provider. The second was the sudden decision to start promoting “average speeds” on their broadband packages (here) and they’ve also sneakily stopped selling to people with slow sub-2Mbps lines (here).

Today Sky has also announced that their premium Sky Q TV service will no longer require a Satellite dish to be installed on the side of your property. Instead you’ll be able to access the same content via a broadband connection and a new set-top-box, although this isn’t due to launch until 2018.

Stephen van Rooyen, CEO of Sky UK, said:

“This year is about giving our customers even more quality, choice and value. We’re planning to launch our Sky TV service without the need for a satellite dish for the very first time, giving millions more homes the chance to enjoy TV with Sky Q. We are continuing to build our European TV production studio, with 100 original series going into production. And with innovations like the My Sky app, we are finding new ways to make our customers’ lives simpler.”

Naturally that’s going to put a strain on your Sky Broadband line, particularly where 4K is required, although we don’t yet know the final details or performance requirements. On the other hand Sky aren’t doing anything that they haven’t already been playing with via NOW TV. Likewise BT TV has had a similar solution for awhile and they tend to require a speed of 44Mbps via FTTC for 4K support (this includes a bit of overhead for normal-ish Internet use to occur at the same time).

However the biggest development, at least on the business front, has been 21st Century Fox’s (Rupert Murdoch) new attempt to takeover Sky (here); including its divisions in Ireland, Germany and Italy. Admittedly this deal is still subject to some politically divisive regulatory approval, but Fox tends to be much more interested in Sky for its TV / broadcast business than broadband and telecoms. Quite what this means for the future is hard to know.

Jeremy Darroch, Sky’s Group CEO, said:

“We have delivered a strong first half performance across the group, continue to make significant progress against our strategy and remain on track for the full year.

We remain confident in our strategic plans and have made significant progress against them. We’ve launched Sky Mobile in the UK, delivered further enhancements to the customer experience across the group and extended our reach in Europe’s largest TV market with the launch of Sky Sports News free-to-air and Sky 1 in Germany and Austria. Whilst churn in the UK has remained higher than planned, we have a full set of actions to address this, including replicating the success of our Italian loyalty programme which has resulted in reduced churn.

We enter 2017 focussed on giving more quality, choice and value to our customers. In the UK we plan to launch our Sky TV service without the need for a satellite dish for the first time, at the same time as pushing ahead in the £15 billion mobile market.”

As usual we don’t get a lot of detail on the broadband side from Sky’s report, but they do reveal a few small bits of fresh financial information. For example, Sky’s churn rate is 11.6% (up from 11.2% six months ago) and their Average Revenue Per User (ARPU) remains flat at £47 per month.

Sky UK and Ireland also saw six month revenue of 4,267m (up from £4,072m in the first half) and their operating profit delivered £620m (down from £756m in the first half). See the full results.

UPDATE 27th Jan 2017

Both Sky TV and NOW TV look set to lose 12 channels, including some very popular ones, from 1st February 2017 unless a last minute deal can be reached. The channels due to be chopped are as follows: Animal Planet, Discovery HD, Discovery History, Discovery Home & Health, Discovery Science, Discovery Shed, Discovery Turbo, DMAX, Eurosport1, Eurosport2, Investigation Discovery, Quest and TLC.

The impact from this could be quite significant and Sky will need to think carefully, although at present neither side appears willing to budge. Discovery want more money and Sky doesn’t wish to pay what is being requested, but losing some of the broadcasters most popular channels would be very risky and will hit NOW TV’s more focused user-base particularly hard.

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By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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18 Responses
  1. Matthew Skipsey says:

    This is the beginning of the end of cheap ‘unlimited’ broadband folks.

    If Sky Q are going to push their 100s of SD/HD/UHD live channels, as well as catchup VOD over the Internet, then this is going to take some serious bandwidth!

    Worst rate of ~20 Mb/s, 4 hours per day, 30 days per month, is around 1TB of data transferred. And this is just one box.
    Best rate of ~10Mb/s is 500GB naturally.

    Some will have two or more boxes. So double or triple bandwidth requirements.
    Some will also do some Netflixing and other online TV viewing.
    Some will be downloading huge online game updates.
    Some will just use it for normal web & email.
    That’s a lot of data!

    We all know the majority spend more than 4 hours in front of the TV in any case (add weekends/kids/multiple boxes).

    Naturally, most will still continue to have their Sky dish, so this won’t affect all, but this is the thin end of the wedge, as a major player announces IPTV proper.

    Watch this space!

    1. Steve Jones says:

      Of course it is a lot of data, but what will mitigate it is content delivery networks (CDN). You can bet that the major players are all putting a lot of money into that. Just how deep they will be putting their media servers into their networks would be interesting to know.

      This also points out an issue with “net neutrality” in that the topology of the networks, peering and CDN interconnectivity will play an increasing role in performance. This sort of deep penetration of CDNs into networks is also a scale issue – it’s difficult for a smaller operator.

    2. Mark Jackson says:

      Indeed it’s difficult for smaller players, but then more or less none of those have a true IPTV platform. Most of them don’t really feel a need to offer it and others may simply not have the money required in order to launch such a proposition.

    3. dave says:

      your bandwidth estimates are way too high. Sky will certainly use h265 for this and most people will be watching 1080i. They could do 1080i with 5Mbps and achieve decent image quality, use ac4 or dolby digital plus and the audio won’t need too much data either. This would save sky the cost of buying a satellite dish and paying an engineer to install it and also for a satellite tuner in their box.

    4. Matthew Skipsey says:

      Obviously working on the basis of those bandwidth figures so you see my workings.
      If the rate is lower, then the usage will be lower.

      I have monitored what our Sky Q uses over the LAN when you watch TV from a Mini connecting back to the Silver box.

      SD was around 6 Mb/s
      1080 HD was around 15 Mb/s
      (from what I recall.)

      The Sky Q mini box doesn’t support UHD, so no idea on this.

      Sky may provide a better codec for their IPTV offering?
      They may only offer this using multicast on their own FTTC/P product?

      Of course, the likes of Netflix have proven with good codecs you don’t need the 40Mb/s or whatever everyone was scaring everyone about with UHD.

      For the smaller providers that don’t have direct access to the FTTC/P GEA cablelinks in the parent exchanges, and have to purchase wholesale, and especially on 95th percentile, over time this will cause a change in commercials for them.

    5. AndyH says:

      “For the smaller providers that don’t have direct access to the FTTC/P GEA cablelinks in the parent exchanges”

      Surely if you’re not paying for the GEE Cablelinks yourself, then you’re paying BT Wholesale? Not quite sure what difference that makes. You need bandwidth, you pay for it.

    6. Chris P says:

      @Matthew Skipsey
      most of Sky’s customers will be on net, meaning they will be sky broadband customers, all that bandwidth will be running over sky’s own backhaul & sky’s LLU enabled kit in exchanges etc. Its their issue to deal with, in most cases they will just buy more backhaul capacity from their congested exchanges from openreach. This extra traffic will not impede other providers unless the other providers customers are also streaming sky. I imagine the offer of sky TV, BB & Mobile will persuade most customers to be on sky bb if they have sky tv.

    7. Apolloa says:

      Sky has enough bandwidth. It’s invested heavily in its network for years. The key will be the network of others like Virgin and BT, Sky uses part of Virgins backbone and vice Vera’s for instance. They only offer a few programmes like BT and Virgin in UHD anyway. The vast majority are still 1080P and below.

    8. MikeW says:

      Sky’s core network, as of 2 years ago.

  2. Steve Jones says:

    @Mark Jackson

    The issue over streaming of media content matters will matter to smaller operators too. We are increasingly moving to on-demand services and the amount of streamed content from the BBC and other broadcasters is increasing all the time. In some ways its more convenient for me as, if I miss the start of a program, with iPlayer live streaming I can replay it from the start.

    Clearly smaller operators can still use CDNs, but they won’t be able to embed them so deeply in the network (unless they are just reselling another wholesale network). It’s also an issue for access to content controlled by other network operators who might not be so interested in allowing efficient access from other networks (like Sky, BT Consumer and Liberty Media).

    1. AndyH says:

      It will only matter to smaller operators offering unlimited packages though, of which I assume the number is very limited because of the backhaul costs through the BT Wholesale network.

    2. Chris P says:

      small or large operators don’t USE CDN’s they peer with CDN’s often at places like LINX or in their own DC’s.
      the CDN’s job is to deliver content, ISP’s want to ensure as much traffic as possible is on net so they are not paying other operators for bandwidth, which is why they peer with CDN’s. some companies even pay to peer, i.e netflix, google, apple etc will pay to directly connect to ISP’s to ensure their traffic reaches their users in the best possible way (i.e not through to many intermediary’s)

    3. AndyH says:

      Peering isn’t the issue so much in the UK – it’s the cost through the BT Wholesale network (£48.55 per Mbit/s per month exVAT for those smaller ISPs on WBMC Shared).

    4. Steve Jones says:

      There are several different CDN models. Companies like Sky can operate there own for their own network and put the media and caching servers deep into the network if it makes sense. Indeed, there are Telco CDNs which do much the same. BT Wholesale launched Content Connect in 2011, but I’m not sure it was very successful and seems to have been replaced by something called TC Connect.

      Peering with CDNs at the major interconnect points is always possible of course. But it does take more backhaul.

      This is the SIN document for TV Connect



  3. adslmax Real says:

    Jeremy Darroch, Sky’s Group CEO should be SACKED because of this:

    Sky viewers are about to lose these 12 channels from 1st February 2017
    One broadcaster claimed it is paid less by Sky now than it was 10 years ago.
    The 12 channels under threat

    Discovery Channel
    Eurosport 1
    Eurosport 2
    Animal Planet
    Investigation Discovery
    Discovery Turbo
    Discovery Shed
    Discovery Science
    Discovery History
    Home & Health

    1. Ignition says:

      Channel carriage disputes are normal. It’s surprising that there aren’t more of them

    2. AndyH says:

      Sky (and BT) paid silly money for Premier League rights, now they will begin to feel the squeeze I hope. Paying £33m to broadcast every single Premier League match is lunacy.

  4. Peter Taylor says:

    Regarding the amount of data, it’s my guess that they will utilise Freeview for the 5 main channels, then sew it all together with their IPTV offering on the interface. It’s just a guess, but I don’t think Sky would ignore the free data ride offered by terrestrial signal delivery. Just like BT’s YouView!

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