In 2001 when BSkyB began offering Sky+, its first digital video recorder (DVR), it chose NDS’s XTV™ personal TV solution. This was a logical choice because NDS was already a key technology solutions provider to Sky.

Since its launch, Sky+ has been installed in almost 1.5 million households throughout the UK, making it a strategic addition to BSkyB’s product offering. In the five years since launch, the Sky+ DVR solution has lived up to its potential:

• Viewing hours per week have increased
• Over half of Sky+ homes watch more channels
• Sky Digital premium subscriptions have increased
• More than two-thirds of Sky+ customers are “more satisfied with Sky Digital” than before they had Sky+
• More than one-third of Sky+ sales are a result of personal recommendation

Sky+ is also living up to its promise of generating new revenue streams that increase revenues per user. Its end-to-end security, coupled with local storage, enables new pay-TV and VOD services from the hard disk. With an increasing number of Sky+ households being first-time subscribers, it has also become an important tool for reaching out to consumers who have not previously subscribed to a pay-TV platform.

Brian Sullivan, Sky’s Director of Product Strategy and Management is responsible for strategic and commercial development of Sky’s new and existing offerings in the UK and Ireland digital pay-TV markets.

Sullivan joined Sky in 1996. Previous positions at Sky include Channels Marketing Director when he was responsible for revenue maximization. He was also instrumental in Sky’s migration to digital broadcasting.

Before joining Sky, Sullivan worked for Eagle Direct and Showtime in the US. He recently took time to discuss current and future developments at BSkyB with World Vision.

World Vision: I’d like to begin by asking you to give some details about BSkyB. Specifically, how many subscribers do you have, how many channels do you offer them, and perhaps who your viewers are.

Brian Sullivan: BSkyB has been the UK’s leading pay-TV provider for more than 17 years. Our first pay-TV milestone was the launch of Sky Multi-Channels in 1993, but there have been many significant developments since then. We launched Sky digital five years later with 140 channels. In 2001 we launched Sky+, a fully integrated digital video recorder. In May 2006, we launched Sky HD [high definition] and in mid-July we announced Sky Broadband.

Today Sky has more than 8 million pay-TV customers. That means almost one out of every three UK and Ireland households gets their TV from Sky.

We offer well over 400 channels including mainstream entertainment, movies, world leading sports services, and niche channels for just about every individual taste. We also offer the largest single source of digital radio and the first fully integrated interactive news and sports programs.

Our viewers are a reflection of the general UK population. They come from every demographic group and every economic stratum.

What types of programming do you offer?

Sky began our pay-TV service with a core set of three channels: Sky One, Sky Sports and Sky Movies. These services have been expanded and added to --mostly with the introduction of digital TV. We now have 12 dedicated movie channels, five sports channels, three versions of Sky One with different schedules, Sky Channel portfolio (Sky Sports news services, Sky News and Artsworld). As a service for UK customers, Sky TV offers a lot more. At this point we can say that we have a selection of the best channels originating in the UK and abroad.

What does Sky+ actually offer your subscribers?
 
Our customers expect Sky to be a leader in both entertainment and innovation. Sky+ brings these concepts together very successfully.

As a form of entertainment TV is still the most satisfying experience for just about everyone. But its delivery – half-hour or hour-long programs scheduled on rigid basis -- hasn’t kept up with changes in our lifestyles in the last 10 years. The fact is, we have the same amount of free time we had before, but now it’s broken into smaller chunks and spread across the day or week. Until the introduction of the DVR, TV didn’t really keep up. Sky+ readapts to how our lives are now, and that’s why customer satisfaction levels are skyrocketing.

Sky+ was introduced about five years ago. How did you envision it would affect your market? Did this put you ahead of the competition? How did it affect your offering and your market?

When Sky+ was first introduced, it was a fantastic experience that not too many people really understood. This was different from the introduction of DVD players which were really just a replacement for VCRs. In general marketing terms, Sky+ is a more difficult concept to grasp. It was really about re-tailoring TV to fit the customer’s lifestyle. We had to spend time educating the market. It was essential for our customers to see the product being demonstrated.  

What happened is that our customers actually became our best advocates. They could explain Sky+ features to anyone they had contact with -- and they did. This has proven to be our most successful means of marketing. The fact is 40 percent of our sales come from personal recognition from current customers recommending the service to someone who doesn’t have it yet.

To emphasize my point, after the first year, we had 29,000 customers. Four years later, we have more than 1.5 million.

What are the most popular features offered on the Sky+ DVR and what additional features or trends are you considering?

Most Sky+ customers fall into two groups. The first group time shifts programs on a given day. This means they record a program that airs when they are busy and watch it when it’s more convenient – the same day. The second group time shifts across the entire week. They record programs that are on when they’re not home to play back later.

Ultimately what attracts customers to Sky+ is their ability to decide when they want to record, time-shift and play back programs. They are also enthusiastic about other features we offer like pausing a live TV program when they get a phone call and resuming exactly where they left off once they finish the call, series linking to record all the episodes of their favorite shows, and most recently Remote Record.

What is Remote Record?

Remote Record, which was launched in early July, enables customers to set up a recording when they aren’t home. This has obviously answered a core need. The feedback from customers has almost exceeded our expectations.

Remote Record lets customers book programs in one of three ways: by mobile phone, by sending a text message, or by accessing our website. This service is free for Sky+ customers. [The only charge is to send the text message.]

What we have found is that features like Remote Record add increased flexibility to a product that was designed for flexibility. It’s the perfect complement.

We plan to spend the rest of the summer and fall introducing and signing customers up for Remote Record. Beyond that, the trends are for even more control and flexibility. No matter what, we will always have a 100 percent focus on ease of use for our customers.

I understand that you’re very enthusiastic about the launch of Sky HD. What effect do you expect it to have on the TV viewing experience? Also, is this a mass market offering? What type of programming will it include?

We launched Sky HD a few months ago. It is absolutely central to the Sky offering because it delivers what customers want most: the best viewing experience.

If you think back to when we launched Sky digital, its main attraction was better sound and picture quality. The same is true for Sky HD in that it takes the next step in offering better picture and sound. But this is really a major step forward. Customers can really have a cinema-like experience at home.

I absolutely see Sky HD as a mass offering. First of all, we expect there will be almost 3 million HD-Ready TVs in UK households by the end of the year. The sets are there. What they need is the content, and Sky is absolutely the best company to deliver the content they want.

Our HD services already cover general entertainment (Sky One HD), all major sports (Sky Sports HD), just about every Hollywood movie available (Sky Movies 9 and 10 HD). In addition we launched the two leading HD documentary channels (National Geographic and Discovery) as well as the HD version of Artsworld. This means we have the widest selection of HD programming anywhere in Europe.

The launch for Sky HD TV was originally scheduled for 2008 but was been brought forward. What facilitated the change?

The main reason for launching sooner was customer demand. Consumers were buying sets that could get better content but the content wasn’t available. Our customers expect us to be leaders in innovation. Having become known for offering our customers so many “firsts,” it was natural for Sky to lead the UK in the HD area as well.

Another critical factor in bringing forward the launch of HD was the successful introduction of a new set of technologies including MPEG4 which allows us to take advantage of virtually unlimited bandwidth on satellite to offer our customers truly diverse programming selection.

Can you give some details about the HD TV DVR such as the size of the disk and what viewers will be able to do with this new DVR?

We decided that if we were going to launch HD we were going to do it on basis of Sky+ which is our best viewing experience. This means that all HD STBs are DVRs as well. The box itself has more than 300 GB storage of which 160 is reserved for the customer and 140 GB is set aside for future services. This means customers can record up to 30 hours of HD programs and up to 80 hours of standard definition (SD). We have future-proofed the Sky HD boxes by including broadband connectivity. This keeps it open for a wide array of future services.

What role has NDS played in helping Sky improve your offering? Specifically, how has Sky changed over the last 10 years, how has NDS changed, and how have these changes affected the relationship?

Sky’s relationship with NDS goes all the way back to our original launch 17 years ago. At that time both companies were relatively small and just starting out. Together we’ve changed the pay-TV landscape – not just in the UK – but all over the world.
                       
NDS has been at the heart of Sky’s development at every major step of the way – including our original multi-channel service, the launch of digital TV, the introduction of Sky+ and most recently, HD. NDS is part of just about every aspect of our future roadmap for customer services and is at the heart of Sky’s commitment to innovation.

For more information:

XTV          http://www.nds.com/personal_tv/personal_tv.html
Sky+        http://www.nds.com/personal_tv/skyplus_case_study.html