Netflix vs Sky: The war to come that will change TV
As a rebranded Sky Movies challenges Netflix, our reporter considers the looming struggle for TV domination
Published 19/06/2016 | 02:30
The gloves are off, the knuckle-dusters on, in the battle to dominate the booming streaming television market. Sky this week announced the rebranding of its movies service as "Sky Cinema" - widely perceived as a fusillade across the bows of challengers Netflix and Amazon Prime.
Certainly, Sky needs to get in the game if it is to retain its position as one of the most popular networks in Ireland and the UK. In Britain, it faces competition from both Netflix and Amazon Prime, though this is less of an issue in Ireland where Amazon's streaming offering is unavailable (of course, with a little technical savvy, you can get around the so-called "geoblocking").
How far we have come in the four years since Netflix launched in Ireland. Back then, the company was perceived as a plucky upstart in competition with online bootleggers such as Pirate Bay rather than as a grown-up broadcaster in its own right.
However, that has changed as Netflix has repositioned itself as a provider of premium content, with House of Cards, Orange is the New Black (just back with a fourth season) and other shows hoovering up awards and basking in critical plaudits. Today it has 70 million subscribers worldwide and an estimated 200,000 in Ireland, having gained rapidly on Sky's 500,000 user base here.
The challenge for Sky is how to pivot from its entrenched position as a leading player in cable and digital TV and challenge Netflix (and Amazon in the UK) in on-demand. With Rupert Murdoch's billions to draw on, the organisation is unquestionably in a strong position: Sky Atlantic is the only legitimate way to see Game of Thrones in Ireland and the network has invested heavily in new drama, albeit with wildly varying results.
Some viewers will have enjoyed expensive curios such as Fortitude and The Last Panthers; many will wonder if this is the best Sky can come up with. "We don't need every single drama to work," Stuart Murphy, former director of commissioning at Sky told me two years ago. You can appreciate his logic: Game of Thrones might be the only Sky Atlantic show you want - but your appetite for the "t*** and dragons" juggernaut could well be sufficient to keep you subscribing.
"The shows that people do want to watch, we want them to absolutely crawl over broken glass to see," said Murphy. "There was a time you'd come home from work at eight o'clock, see what was on TV and watch non-stop for three hours.
"Now, after 20 minutes, I might put on the planner to see what else is on; I might put on a DVD. I'm a lot more selective. What plays in our business are a few properties that blow everything else out of the water."
The same logic drives Netflix. It understands House of Cards fans may very well have no interest in Orange is the New Black. So long as they are prepared to fork out €9.99 a month to keep abreast of Frank Underwood's latest misdeeds, that doesn't matter. In the new television world, the show is the star. All that is needed is one hit to hook you in.
Gallingly for Irish viewers, one of the most dynamic players is Amazon, which has bankrolled a series of acclaimed dramas, including the Jeffrey Tambor transsexual comedy Transparent and The Man in the High Castle, one of the best science shows of the past 20 years.
We're not alone in being overlooked: the video component of Prime is currently only available in the US, Britain, Germany, Austria and Japan (subscribers additionally benefit from cheaper and faster shipping of physical purchases). This is frustrating for anyone seeking an alternative to Netflix that does not include a cable component (currently you can only subscribe to Sky's streaming services as part of a digital TV package).
One reason Sky is taking its time getting into streaming is because it does not wish to alienate its existing customer base, a significant chunk of which will be quite happy with watching television the old-fashioned way.
"One of the differences between Sky and someone like Netflix is that we've got a user base of 12 million customers and a lot of them have a long tenure with us," Stephen Van Rooyen, head of marketing and digital for Sky, told a UK newspaper recently.
"At the end of the day, we have to cater for someone who is young and living in London to someone who lives in Scotland and has been a customer for 10 or 15 years," said Van Rooyen. "When we change things, we have to do so on a considered basis so that our customers become used to it. The cadence with which we change things, around three or four months to let them bed in, is right for us."
Yet Sky has already responded to shifting habits, with the online iteration of its movie site offering Netflix-style curation (its recommendations feature clearly inspired by its US competitor). With the Sky Cinema rebranding, taking effect from July, the network is also to increase the number of premières across its movie channels to one per day. The company has furthermore ratcheted up its Sky Plus service in the past several years, allowing subscribers to stream series such as Game of Thrones and Damian Lewis's hot new drama Billions at their leisure. Swap the blue livery for red and you could be watching Netflix.
What all of this proves is that the bingeing model is here to stay.
"Clearly, the success of the Netflix model - releasing the entire season of House of Cards at once - has proved one thing: the audience wants control," House of Cards star Kevin Spacey told me. "They want freedom. If they want to binge - as they've been doing on House of Cards - then we should let them binge."
"The watercooler moment, what is that really?" Terence Winter, creator of the critically panned HBO series Vinyl has opined.
"At its core, it's people having a reason to have a conversation about a shared experience, but there's a lot of ways to have a shared experience. That can be live-tweeting. That can be people that have binge-watched a season of something and told their friend, 'You have to binge-watch it, so we can talk about it'."
"Internet television is going to be very transformative," Netflix founder Reed Hastings told the Irish Independent when the service launched here in 2012. "It's like the mobile phone compared to the landline. We've had broadcast television for 60 years now, with the internet you click and watch.
"Over the next 20 years, everything is going to become click-and-watch and on-demand - sports, news, TV shows. We'll still have broadcast, after all we still have landlines - it just won't get used very much."
Night at the flix
House of Cards
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