Market Insight

Sky VR: a VR testbed, not pay TV

October 05, 2016  | Subscribers Only

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Sky has launched its free to download VR app, supported on mobile by Google Cardboard and Samsung Gear, Sky VR is also supported on PC with Oculus Rift. On smartphones, the app can also be used without a VR accessory where video will simply be rendered in 2D, 360 video. At launch the app has around 20 pieces of content including some specially produced media showcasing upcoming Sky Sports events. Other content available is mainly generic and is also available from a number of other VR apps and platforms. Sky has announced that it will commission a number of other VR exclusives in future including Sky News - US Elections and Tutankhamun's Tomb -The Search for Nefertiti.

Content in the app at launch includes: Star Wars: Red Carpet, Anthony Joshua: Becoming World Champion, two VR experiences from The Jungle Book, promotional Suicide Squad material - Squad 360, a Tour de France production: Team Sky - Journey to the Tour, and a behind the scenes F1 piece.


Our Analysis

Sky has a history of making technological and investment gambits being an earlier adopter of both multiscreen TV and standalone ‘pay lite’ services. Sky also was one of the first broadcasters to distribute dedicated 3D channels and is now heavily backing 4K content as the next premium format for consumers. Sky also has a history of investing in promising tech and content companies. Investments into companies such as Jaunt and iFlix show that Sky will back innovative approaches to content aggregation and production, while investment in new tech companies resulted in part in the creation of the Sky Q box.

A Sky move into VR makes strategic sense as the company generally aims to maintain a lead in video innovation over its UK based rivals. However this latest development is lacking the necessary depth for a fully-fledged play for market share. Previous launches of technology and consumer propositions were always backed by premium content, cherry picked from Sky’s extensive range of top drama and sport. Content on the VR app is free and generic, featuring much content which is not new or even exclusive to the Sky VR platform.

Sky has also only mentioned plans to commission a small amount of basic VR content. Missing are promises of live sports coverage or exclusive drama miniseries which would be expected with a full launch. The app also lacks any method of conditional access.

The lack of proper content investment indicates that this current iteration is more experimental; designed to gain insight into consumer demand and as a development testbed should Sky decide to invest further in this area. Sky will also be looking to capitalise on the consumer hype around VR, and will use the app for dissemination of promotional material. The lack of conditional access also indicates that premium content will not currently be deployed to the VR app, as this would dilute the value of such content for existing subscribers. Live sports and VR highlights from premium content will likely not be released via the VR except for promotional purposes.


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