[Satellite News 01-31-12] BSkyB is launching a new over-the-top (OTT) broadcast service this summer that does not require a satellite subscription, signaling a break from its space platform in favor of a strictly IP-based architecture, the company confirmed Jan. 31.
   Speaking at press conference, BSkyB CEO Jeremy Darroch said the unnamed service would integrate its Sky Movies, Sky Sports and entertainment offerings into a package targeted to several devices including tablets, smartphone, video game consoles and connected televisions. 
   “[The service] will give another choice to the 13 million U.K. households that have chosen not to subscribe to pay-TV,” Darroch said. “It will be a new way to reach out to consumers who love great content but have no need for the full range of Sky services. There also will be no infrastructure investment needed.”
   In a research note, Bernstein Analyst Claudio Aspesi called the move one of the most significant developments in the company’s history. “The unbundling of pay-TV appears to be a direct response to the launch of Netflix, but also seems to suggest that additional growth through the old model of bundled pay-TV through satellite is coming to a natural end in its growth.” 
   The operator has been defined by its satellite distribution system since launching it in 1990. Allowing customers to subscribe to Sky Sports, Sky Movies and other offerings directly via Internet TV represents the first time BSkyB has announced a significant de-coupling of its content and its distribution platform. 
   BSkyB has packaged Internet and TV services such as Sky Go and the Sky News iPad app to mobile devices since 2006. However, those services had been launched as an enhanced value proposition for existing BSkyB satellite subscribers. The operator has traditionally driven up the price of those services for non-satellite customers in order to drive new subscriptions. Some analysts have said the move also issues a direct challenge to Netflix, as some have predicted that the popular streaming movie service may continue to lose its market strength.
   Aspesi said that BSkyB might have seen the new wave of Internet TV service success as a threat to pry existing and new consumers away from its core satellite option. “Consoles, dedicated boxes, integrated connected TVs that ship with thousands of free on-demand services and cheaper over-the-top operators like Netflix were taking their toll on BSkyB.”
   Darroch acknowledged the impact on BSkyB TV sign-ups. The company saw its subscriber base shrink from 140,000 in the second quarter of last year to 40,000 this year. “Due to the economics, some people are uneasy about making a long-term commitment right now,” Darroch said. “The logical step is to take the opportunity and push top-tier pay-TV content to a new generation viewers turned off by pay-TV. I don’t see it as a threat to our business at all.”