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Sky to move pay TV services to broadband

The days of the satellite TV dish are numbered as Sky signals its intent to switch to an IP streaming delivery model over broadband connections

Sky will end its satellite television service in the near future, with all its channels and on-demand content streamed over internet protocol (IP) via a standard broadband connection, the firm has revealed.

“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,” the company said in its latest set of six-monthly results.

Sky’s group chief executive, Jeremy Darroch, said the dish-less service would be launched first at its Austrian and Italian businesses, with the UK expected to follow in the near future.

The company’s satellite dishes have become a familiar sight across the country since it launched the UK’s first official satellite TV service in February 1989 with just four channels, Sky Channel (later renamed to Sky One), Sky Movies, Sky News and Eurosport.

However, with growth in over-the-top (OTT) streaming services such as Amazon Video and Netflix, and the fundamental change in television-viewing habits this has precipitated, Sky has been under increasing competitive pressure. While its results were generally positive – like-for-like sales grew by 5% to £6.7bn and earnings before interest, tax, depreciation and amortisation (EBITDA) was up 10% to £1.1bn over the six months to 31 December 2017 – this is not expected to change.

“We expect the consumer environment to remain challenging, however, we remain confident in our strategy and our ability to execute our plans,” said Darroch.

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Rob Hilborn, head of strategy at broadband comparison site Broadband Genie, welcomed the move by Sky.

“This is a sensible move considering the increasing pressure from major streaming services. This is all about Sky adapting to changing TV viewing behaviour and anticipating further increases in users cord cutting,” he said.

“It’s good news all round for potential customers. We should see a reduction in upfront costs for those looking to take a Sky TV service. This move also potentially opens its services to new customers who were previously unable to access Sky’s satellite TV service as they no longer need to seek permission to install a dish, which are a bit of an eyesore,” added Hilborn.

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