The new IP only unit will make its debut in the Spring in Italy before later being rolled out into Austria and then the rest of the Sky footprint. Sky already has an OTT platform in Spain and this will also take the new IP box.
“We will launch Sky without a satellite dish, with all its channels and on demand content streamed over IP. This is a major development for Sky that will open up headroom in existing markets, improve our cost to serve for some customer segments, and offer a future way to take Sky into new markets,” said Sky Group CEO Jeremy Darroch.
He estimates six million households find it hard or impossible to get a dish.
“Having deployed over-the-top services in all of our markets, we have a strong set of plans for our streaming business, most notably migrating all of our territories onto a common OTT platform.”
However, Sky isn’t ready to give up on the satellite just yet, asked in an investor call how dishless services might impact on future negotiations, chief financial officer Andrew Griffith said Sky had been able to support moves to HD and Ultra HD through existing expenditure. “There’s a good role for satellite as part of our mix, we’re running a hybrid platform, but it has been a source of efficiency and it will going forward. The opportunity on IP is primarily about opening up new areas of headroom. Ultimately we’re about providing services to customers in the way that suits those customers… over time we’ll have to see whether existing customers can either replicate the full range of services or prefer the increased flexibility of consuming on an IP only basis.”
Subscribers in Germany and Italy are already being moved from Pace, Humax and Sky’s own units running versions of the Cisco Fusion platform onto the Sky+ Pro UHD receiver, launched in April 2016.
The next stage is to move to the latest satellite version of the Sky Q receiver that debuted in the UK in January 2016. By running a common hardware, UI and middleware, Sky is predicting savings of £40 million a year.
Sky Q launched in Italy last November and will appear in Germany and Austria in the next six months.
Average revenue per user in the UK and Ireland fell £1 to £46 a month. Darroch said the recent reorganisation of its Sports channels had not resulted in the amount of spindown that was expected. The challenge in the sports market was in bringing new subscribers on board.
A 5 per cent increase took revenues to £6.7 billion and an operating profit of £573 million.