Sky has done remarkably well with its HD offering - it remains unique in the UK, they've exploited their investment in content and technology (some would argue as is their right) and they've achieved stunning growth in a recession against not just the competition of Virgin Media but also of course Freeview, Freesat, BT Vision and the download community. They've lowered the cost of entry to the point where the HD Sky+ is the standard install, but have managed to maintain the £10 a month surcharge for HD. With the explosive demand for HD (who saw that coming? Certainly not Virgin) they own the premium market and have exploited their unregulated monopoly to great effect. Sure, OFCOM's done some initial sabre rattling about the HD versions of Sports and Movies being covered by the same rules as the standard definition channels, but Sky have ridden that so far and are marketing "Supertelly" like there's no tomorrow. But there is a tomorrow, and here's where I think they're going next.
- Sky will shift its marketing focus to 3D, another premium priced product. I've no interest in it personally, but others will buy it if it's pushed hard enough, and if there's one thing Sky truly excels at, it's marketing
- Sky will respond to Virgin's free HD channel offering by reducing the monthly sub to HD and making the non-premium HD channels in its offering free to owners of the Sky HD+ box
- There'll be a big push for the new Sky HD+ box with the 1Tb disc (actually 1.5Tb - a third of that is set aside for the Sky Anytime service). £249 a pop
- Sky will now cash in on the HD channels by selling them through Virgin Media - exploiting their investment further, picking up more viewers and allowing them to sell premium advertising spots on the HD channels. As we exit the recession, advertisers will be asked to cough up even more if they want to reach the discerning audience with the deepest pockets
- Sky knows that they still have the best HD service - not only do they have superior coverage, but they also have Mpeg4 and have increased the PVR capacity, whereas VM customers still have the wasteful MPeg2 compression filling their smaller discs. (What's more, we can't upgrade our discs to large capacities legally). If you're serious about HD, 160Gb discs are not sufficient
- OFCOM will tell them they must do it anyway, and the Tories won't overturn that over night nor can Sky drag it through the courts.
- Sky1 HD will remain unique to Sky
- Virgin will continue to offer the barest bones of an HD service via VoD.
Comments? Like I say, that's probably jinxed it for good...