It does not happen very often but sometimes you can gain such a huge lead on competitors, you can actually start dictating the timetable. From the “Competitor Window” article you’ll see that we recognised an opportunity.
What if we took it one step further, what if we decided to go after the competitors. If you look at the back of the original Sky+ HD PVR (May 2006) you’ll see an Ethernet port. There was no immediate need to add that port. Adding a port increases the BoM (bill of material) cost, which is normally a career ending decision. We added this to the specification to allow us to use broadband for additional services, or to actually take over from Satellite as the delivery mechanism. We figured out that there were about 4M households we might be able to serve if we added this capability. Our strategists had helped us to paint a 3 year future vision where a large proportion of the UK would have access to high speed broadband (note that ‘high speed’ was classed as more than 2Mbs!). In this future world, we wanted to make sure we had enough devices in the marketplace to make a significant impact. 4M Sky+ HD set-top boxes felt like a big enough target, and it would contribute to company strategy of bundling broadband as part of the Sky package.
Hot on the heals of launching HD and just before I left Sky, we performed an end-to-end trial of streamed content to the Sky+ HD box.
The interesting thing was that there was no need to launch the service just then.
It would potentially confuse or cloud the success we were having with the HD offering. The plan for IPTV changed from being a disruptive launch, to one that could be refined and launched when our new broadband service had passed the 2M target. Note how the ‘bundling’ is being done. It’s not just putting items on the same bill. This approach was aimed at intertwining the two disparate services. From customers perspective one service might justify the other. Thus you create a more valuable package for the customer.
Jump forward to the latest Sky results and you’ll see that the number of Sky+ HD boxes that are connected to broadband is dramatically increasing (a function of better network speed, more appropriate messaging from Sky and the improved on demand services).
It does not happen often, but it’s a nice feeling to be one or two steps ahead of the competition.
Image(s) courtesy of BSkyB.