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BSkyB Video Service Sheds Light on News Corp.’s Streaming Future

Though tentative so far in its efforts to exploit streaming TV, the company has the means to move forward aggressively


News Corp. (NASDAQ:NWS) is leery of this newfangled streaming television business. The company’s numerous subsidiaries have been cagey about embracing nontraditional television and movie distribution. When the first Google TV devices from Sony (NYSE:SNE), Logitech (NASDAQ:LOGI), and Google (NASDAQ:GOOG) released in the fall of 2010, News Corp.’s Fox Broadcasting famously blocked its television content from the platform.

As one of the controlling entities behind streaming website Hulu, News Corp. at one point seemed as if it was hoping to lead the streaming TV pack, but at the end of last summer the company began restricting access to new content through the service. It’s not unwilling to take a bet on Web-based TV distribution—the company was quick to sign on for Apple‘s (NASDAQ:AAPL) ill-fated 99-cent TV show rentals through iTunes. On the whole, it’s just nervous about the whole business.

BSkyB‘s (PINK:BSYBY) new streaming service might be the one to finally convince News Corp. that streaming is as vital a component in its future television and film ventures as regular old cable and movie theaters are.

The British satellite television service–formally known as British Sky Broadcasting Group, in which News Corp. owns a nearly 40% stake–is looking to take on Netflix (NASDAQ:NFLX), Hulu, Amazon (NASDAQ:AMZN), and small-fry streaming contenders like Dish Network‘s (NASDAQ:DISH) Blockbuster with its own Web-based service.

A chance to get a foot in the door

BSkyB isn’t a complete stranger to the streaming business. Its Sky digital satellite TV service offers streaming movies through Sky Movies. Previously, though, Sky Movies streaming options were available only to subscribers of the channel.  Access to the new Sky Movies streaming service, like Time Warner‘s (NYSE:TWX) HBO Go, can be purchased independently of a premium-channel subscription on the satellite service. Rather, content can be purchased a la carte or through a monthly subscription fee that doesn’t require a contract.

Sky has a golden opportunity to establish itself in the nascent streaming video market in the U.K. and Ireland. Netflix has only just started serving the region, and its content selection is still limited. Amazon is a bit more entrenched thanks to its LoveFilm service, but that service only has about 1.7 million subscribers. Sky’s television services command a subscribership of 10.4 million, less than half of Netflix’s global membership but significant nonetheless. The brand’s strength and strong content partnerships should help it establish the new streaming service when it opens for business during the first half of the year.

If the Sky Movies streaming service is a successful adjunct to Sky’s regular satellite service, it will be interesting to see how News Corp. and its subsidiaries react. Will the company retract its eight-day delay on new content being available online? What will happen to its stake in Hulu? That service continues to grow, but its Hulu Plus premium service is growing so slowly that News Corp. may see opportunity in allowing Fox to follow in Sky’s footsteps and start a new streaming service of its own that it can control more directly. The company has options. But one thing’s clear: News Corp. can no longer afford to be noncommittal in its streaming plans.

As of this writing, Anthony John Agnello did not own a position in any of the stocks named here. Follow him on Twitter at @ajohnagnello and become a fan of InvestorPlace on Facebook.

Article printed from InvestorPlace Media,

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