Media analysts believe there's little evidence that people subscribe on the strength of a single channel. "Sky Atlantic is part of a chain of value, aimed at convincing people TV is worth paying for," says one analyst. "It's about [putting] clear blue water between pay and free TV. It's not so much a driver of dish sales as a retention tool … as well as justifying future price rises [...]
What does the launch mean for rival pay-TV providers? Virgin Media stresses that Sky has talked about "wholesaling" Sky Atlantic to other platforms, while also pointing to the continued availability of channels such as FX.
In fact the strongest short-term competitive impact of Sky Atlantic – when allied to Sky's acquisition of Living and an increased budget for Sky1 – may be on the acquisition strategies of other broadcasters; its lineup contains shows previously aired free-to-air, including Entourage (ITV2), Curb Your Enthusiasm (More4) and Big Love (Channel 5). "The fear for everyone else is how much other stuff Sky will hoover up," says one senior free-to-air broadcaster, who emphasises how vulnerable hit acquisitions are to poaching and price hikes. Sky, the executive suggests, is now the only UK broadcaster with the capacity to do sizeable studio output deals.The full article is worth a read. For one thing, it emphasises that the Sky strategy is to lure the Freeview/Freesat audience rather than the Virgin Media one, probably with the intention of upselling broadband and phone services once they are hooked with the TV.
Sky Atlantic HD launches on the Sky platform exclusively tomorrow.