Market Insight

Sky revamps premium movie service with Sky Cinema rebrand

June 15, 2016  | Subscribers Only

Ted Hall Ted Hall Director – Research and Analysis, Service Providers & Platforms

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Pan-European pay TV provider Sky unveiled a relaunch of its Sky Movies premium content package, rebranding it as Sky Cinema. The name change brings the UK offering into line with its German and Italian counterparts.

Several service enhancements will accompany the relaunch, scheduled for 8 July 8, chief among them:

  • An increase in the number of movie premieres, from four each week to one every day, boosted by a dedicated World Cinema programming block
  • A 20% increase in the size of the on-demand movie library, to 1,200 films at any one time
  • The inclusion of the Sky Cinema HD channels as standard to all movie package subscribers
  • Improved HDTV picture quality, delivering 33% more pixels and four times more colour shades than previously
  • Restart functionality, allowing viewers to watch a movie that has already started airing on a linear channel from the beginning.

Notably absent was a definitive announcement on Sky’s 4K ultra-high-definition (UHD) plans for Sky Cinema, only the confirmation that 4K movies will be available to customers of Sky Q, the operator’s recently launched multimedia home gateway product, before the end of 2016.

Our analysis

Sky’s premium movies service rebrand serves a dual purpose of drawing attention to some notable – though not revolutionary – improvements to one of its flagship content packages, and, from an operational point of view, streamlining it into a more efficient pan-European division.

The latter motive is likely, IHS understands, to facilitate an expansion of Sky’s standalone video streaming service Now TV to markets outside those in which currently operates. Such a move would reflect the evolution of Sky’s business into an expanded pan-regional operation – Sky was keen to emphasise that the rights deals it secures with its Hollywood studio partners are now being done on a pan-regional basis (as are many of its TV content deals) and that this will be the case for all forthcoming renewals. An expansion of these deals to cover new markets beyond the UK, Ireland, Germany, Austria and Italy – such as Spain and France – is certainly feasible.

For Sky’s UK customers, the Sky Cinema rebrand is an exercise in marketing that ensures they are made aware of the value the service offers. Certainly an increase in the number of movie premieres at no extra cost (though subsequent price increases could of course be implemented) will be a welcome improvement.

Offering HD as standard brings Sky Cinema more in line with its SVoD competitors Netflix and Amazon (which actually offer UHD as standard, though catalogues are limited). While acknowledging the competition, Sky was keen to emphasise that it offers something distinctly different, providing its customers with access to 45 of 2015’s 50 top movies 18 months before any other provider. It therefore provides a one-stop shop for many Sky Movies customers, but not all of them – one third also subscribe to either Netflix or Amazon Prime, the operator said.

Other stats shared by Sky suggested that Sky Movies has not been significantly affected by its streaming rivals, having seen consumption consistently increase over the past five years. This has been driven by on-demand, which now accounts for 55% of total hours viewed, supporting Sky’s claim that it remains the UK’s biggest SVoD movie provider.

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