Sky surfs the second web wave

Three smart moves by Sky and its clear that you don’t need to be a New Media company to be successful online. You just need to understand media. Yahoo!, take note.

First Sky bought MySpace and then it decided to dicth satelite for broadband via lines, thus enabeling interactivity and not just one to many broadcasting services. Then this deal was done by Sky with Google:

BSkyB has announced a partnership with Google to provide its broadband customers with branded search, email and other services including a YouTube-style video sharing website.

The deal is being touted as Google’s first global partnership to provide such a range of services and the agreement will also lead to the US search engine giant making its first move into TV advertising.

Initially Google will provide the “click through” search bar and display advertising on Sky’s broadband portal – sharing ad revenues with the satellite broadcaster.

But wait, there’s more!

The two companies are also exploring “future forms of web, TV and mobile advertising”. Under the deal with Sky, Google will look at the possibility of using the information about viewing habits that can be obtained through the satellite broadcaster’s set-top boxes to produce more targeted TV advertising.

Google is already experimenting with newspaper, magazine and radio advertising in the US, using its technology to sell and target adverts.

As part of the deal, Sky Broadband customers will be able to edit, upload and share their video clips on the new user-generated video portal, and can also post and download clips from their mobile.

New communications tools available to Sky Broadband subscribers will include a customised version of Google Mail, Google’s web-based email service for the UK, and instant messaging. Subscribers will be offered addresses at the sky.com domain and the service could be extended to Google’s internet telephony service.

Google’s search tool and targeted search advertising will be introduced across Sky’s network of websites, with revenue shared between the two firms. Financial details were not revealed. Sky is aiming to tap into the UK’s booming online advertising market through the deal.

Compare these bold moves with Yahoo’s dithering over user generated content and Channel 4 and BT’s hamfisted moves into Web TV through their 4oD and BT Vision services.

As Anthoney Lilley points out in today’s Media Guardian (registration required), the biggest problems of prospective broadcasters is how they fund production and not distrinution.

First, video on demand was already here anyway – in the form of the Sky+ box and DVD collection and, for some, Home Choice, NTL or via peer to peer on the net. But I doubt the fanfare amounts to much for another reason. Broadcasters need more than new distribution platforms to define their place in the emerging media ecology. Basically, most VOD services are shops. That’s it. Their biggest effect is to turn media and telecoms companies into retailers. The big problem for broadcasters won’t be distribution but rather how to fund new content.

He continues:

Of course, finding new distribution platforms will be part of solving that challenge but it won’t do the whole job. Likewise, BT Vision might help to lock some people into BT broadband products. The big money for BT is in access and services across a wide front, not in broadcasting.

As for 4oD, it’s early days, but the shop shelves seem a bit empty. I know how hard rights deals are to put in place, but if you download the application – which is a smooth process – and then have a look at what you can, or more accurately can’t, watch from last week’s schedule, you’ll see what I mean.

More tellingly, the 4oD service is conspicuous for its lack of social networking features. C4 claims to be an “editor of choice” for its audiences in that they trust its brand to help them choose what to watch. This is definitely correct in some circumstances.

But not all the time – and it isn’t mutually exclusive with recognising that the “audience” is now an active part of services such as iTunes Music Store and Amazon. Can I send a preview of a show to a friend? No. Can I review it? Don’t think so. Is 4oD aware of my viewing habits and those of people like me and does it prioritise content or recommend stuff as a result? No.

You get what C4 thinks you might be interested in – which has a strong relationship to what they have on the shelves. 4oD is rooted in the mindset of a TV channel.

Locked up in his statement about funding production being the main challenge is this. In this WebTV value chain it is important to be a content and rights owner. Distrubution is taken care of by Google, MySpace and thousands of blogs.

To be able to fund their productions, broadcasters will need advertising or subscription revenues and if they are web savvy, they can get their users/ viewers to make content for them on the cheap.

It’s interesting then that the young Murdoch – sounding a bit like a member of the digirati – spelt out where BT and Channel 4 have been getting it wrong. According to Murdoch: “The weird thing about the media market is that people have thought about it in two halves; online and TV. The truth is, in a connected market, everything is connected.”

Sky knows that they have to open up and give their users an opportunity to watch what they want, and they know that the advertising has to be personalised and targetted like on the internet.

Antony Lilley again:

This is the nub of the problem with 4oD and, for different reasons, BT Vision. Both services have their roots as extensions or protections of existing business models.

Companies which fail to take this kind of thing into account usually lose out to rivals who approach “their” business from a new direction.

And Lilley gives an interesting snippet of news and a big prediction:

With this in mind, look out for The Venice Project from the people behind Skype – it’s aiming to combine social networking and legitimate TV content and I think it might knock the impact of YouTube into a cocked hat.

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One response to “Sky surfs the second web wave

  1. Pingback: Will the Venice Project save TV? « ZuluZulu

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