In February I wrote about the impending battle of the SVOD players. Netflix has finally entered the market so it is time to sit back and watch how it plays out.
Recently a friend has asked me a couple of questions about these services
1) Which one should he choose – try them all as they all have a free trial!
2) How does he set it up – as I mentioned in the original post I think this is going to be a barrier in the short to medium term for take up. Obviously early adopters will work it out but when these services go mass getting distribution (how the customer accesses the content) right is going to be a major hurdle to overcome. It only takes about 30mins to set up and some very basic instructions are below.
The interesting thing was when I looked at which service he should choose the difference in pricing between Sky and the SVOD services became very apparent.
Sky: $69.63: Basic Package $48.70 and Movies $20.93 with a twelve month contract
For that same twelve month contract you could get*
Netflix (HD) $12.99 plus
Neon $20.00 plus
Lightbox $12.99 plus
Now it is completely ridiculous that you need that much content, I can see at most people having two services, so there are some large customer savings on offer and a big risk to Sky’s core business. In fact there are a couple more smaller risks to sky, as the SVOD services are on-demand there is no need to have a mySky service and the SVOD providers all provide HD so you don’t need to buy an HD ticket.
However the risk to Sky isn’t a short term risk as there are a few of things in Sky’s favour
SPORT: Sky still has sport – to get sport you need pay the $48.70 basic package
The US experience is that total media consumption goes up before SVOD begins to cannibalize live TV
This is a long game it took many years for the US market to shift their viewing habits from traditional TV If you follow my set up you will need to have an apple TV, iPad and likely unlimited broadband.
If you want more information on the impact and changing consumption patterns in the US this article is a good starting point.