Sky Deutschland changes rules with free sports portal

Sky Deutschland has launched a free-of-charge sports video portal, building on the success of its advertising-funded free news channel which was launched in December 2016.

The new portal will include breaking news, video highlights, expert opinion and live streams, as well as a couple of other features, as the BSkyB owned business is seemingly looking to cash in on the growing move away from traditional TV. The new platform will cover some of the country’s most popular sports including European football leagues and the UEFA Champions League, as well as Formula 1, handball, tennis and golf.

While Sky is very much on the outskirts of the telco world at the moment, this development sends some worrying messages to the telcos in the long-run. The content game is one in which many telcos wish to operate, to complete the much lauded quad-play, with sports being a popular route due to the emotional connection which can be made to potential customers. Deutsche Telekom has taken one route, which seems to become an aggregator of content through its Stream On offering, though others which want to own certain content areas will most likely see the increased competition as a pain.

Another worrying sign for the telcos is the way in which Sky moved itself into the industry in the UK. For years, Sky was known primarily as a Pay TV company and it was very good at it. The quality of the offering might have slipped slightly in recent years, but you can’t take previous achievements away from the team. They were the best, and for most, they probably still are.

This domination in the Pay TV area created a significant cash cow, creating a walled garden to monetize, but also a dedicated following which formed the foundation for diversification. The term ‘slowly slowly catchy monkey’ comes to mind here, as the broadband offering was only formed after years of dominance in the Pay TV area. From there, the MVNO was launched, but only after years of perfecting the broadband proposition.

It was a long-period of gradual steps, nailing one area before moving into the next. And it seems to have worked quite well. Recent figures from Ofcom, detailing the number of complaints per brand for every 100,000 customers, say Sky hit number one spot for both Pay TV and broadband offerings. The MVNO is still in its early days, but if evidence is anything to go by, it would be a fair bet on Sky nailing this area as well.

This is a long-bet from Telecoms.com, but why not? The strategy worked in the UK, so who is to say that a bit of disruption in the German market wouldn’t work as well. For the moment however, it will just remain a pain for those German telcos who want to get into the sports content space to compete in the convergence game.

The advertising-funded business model (i.e. collecting subscribers through free content and then monetizing) seems to work very well for the OTTs, who are slowly ruining the ARPU business model. Germany is a big market to crack for ambitious multi-nationals, so we might have to be satisfied with a disruption to the sports content space just now.

But keep an eye on the horizon, Sky has relationships with various different content avenues (i.e. music, film, TV series etc.) through its various ventures around the world, as well as a successful path demonstrated in the UK for diversification into the telco space. Further toes might be trodden on before too long.