Six Questions: Gidon Katz — Director, Now TV11 Apr, 2014 By: Erik Gruenwedel
When BSkyB, the British satellite-TV operator, launched Now TV in 2012, it marked the first time a multichannel video program distributor offered a standalone over-the-top video service outside of the bundled subscription ecosystem.
Such a scenario remains a pipedream in the United States, where cable, satellite and telecom operators continue to pay lip service to the concept (Comcast is testing a lower-cost/content service in select markets), fearful that actually implementing a standalone streaming platform would undermine the lucrative pay-TV hierarchy.
Now TV, which is available via a £10 branded set-top box (manufactured by Roku), as well as tablets, laptops, PCs, Macs and video game consoles, among other devices, is expressly intended for “cord cutters” and “cord nevers” — the latter typically younger consumers who have never been among the United Kingdom’s 26 million pay-TV households.
Now TV is unique in that it offers access not only to TV shows (£4.99 per month) and catalog movies (£8.99), but it also offers access to live sports (soccer, rugby, motor sports, cycling, tennis, etc.) at an unapologetic £9.99 per day rate.
Home Media Magazine caught up with Gidon Katz, director of Now TV, to find out how the service is doing in a rapidly evolving digital landscape.
• Has the early release of new-release movies on transactional VOD sites affected consumer response to subscription streaming at Now TV?
Katz: No, because Now TV offers something different, namely, unlimited access to hundreds of movies not available on any other U.K. movie subscription service, through the Sky Movies monthly pass. If a consumer wants to rent a specific movie, then they can do so via our transactional service Sky Store, which is available online and also accessible via the low-cost Now TV box. It’s a good example of how we look to provide our customers with a number of options so they can enjoy flexible access to the latest and best movies.
• Why are daily or monthly passes preferable to renting or buying individual digital titles?
Katz: Our research shows that customers respond very positively to being able to enjoy ‘all-you-can-eat’ access to hundreds of movies. If they are big film fans who typically watch a large number of movies each month, then this unlimited access tends to work for them. However, if a customer only wants to watch one or two movies per month, they may find that they prefer to rent movies individually through Sky Store via their Now TV box.
• Does parent Sky produce original content earmarked for broadband as well as satellite distribution?
Katz: As a business, we spend more than £2.5 billion on content each year and have committed to spending at least £600 million on original home-grown programming by the end of this year. We then maximize the reach of this content by distributing across as many platforms as possible. This includes our core Sky+HD set-top box service, as well as via our second pay-TV brand Now TV.
We realize the value of our investments in content by distributing it as widely as possible by both satellite and online — not by restricting its distribution so that it’s only available via broadband. This, more importantly, works best for our customers, who can enjoy flexible access to great content — whether it’s on their main TV through their Sky+HD set-top box, or via their mobile tablet or smartphone via Now TV.
• How much of a threat are subscription streaming services such as Netflix and Amazon Prime Instant Video? It seems Sky has first-run access to movies and premiere programming compared with mostly catalog fare at those SVOD services.
Katz: Sky Movies on Now TV offers the most complete range of first pay-TV window movies available from any U.K. movie-subscription service. We invest heavily to acquire the rights to the biggest and best movies, and then innovate relentlessly to deliver them to our customers across a range of platforms, including Now TV. We’ve always faced competition — it’s what keeps us on our toes and helps us remain focused on delivering great experiences for customers that they can’t get anywhere else.
• Is there any concern Now TV could undermine the traditional bundled satellite-TV subscription package?
Katz: More than 10.5 million customers — around 40% of all U.K. homes — already subscribe to our core Sky+ set-top box service. They are perfectly happy with the service they receive and are not looking to other platforms to access Sky content. Now TV is about packaging and pricing our content in a way that enables us to respond to the demands of those homes who like what we put on screen, but who, for whatever reason, would prefer not to take out a pay-TV subscription. They are perfectly complementary services — Now TV is directed at users who look for another choice that better suits the way they watch TV. It doesn’t in any way aim to attempt to replicate the core Sky+ experience, which also offers features such as HD, 3D, a huge range of TV box sets, an integrated catch up TV service and the Sky+ PVR.
• Some major retailers in the United States include special features exclusive with their studio distribution agreement. Does Now TV offer bonus material typically associated with discs with select titles?
Katz: We haven’t offered that on Now TV. Our transactional VOD [and EST] services are only available through Sky Store, which is an entirely separate product.