Sky to take on cable rivals with broadband TV

Sky (AFP via Getty Images)

BSkyB, the satellite broadcaster, is set to announce that it will enter the broadband TV market, allowing its subscribers to download movies and sports programmes at will.

BSkyB, the satellite broadcaster, is set to announce that it will enter the broadband TV market, allowing its subscribers to download movies and sports programmes at will.

The move will be seen as a direct response to the aggressive plans of cable companies and broadband television companies to hook consumers by offering these "on demand" services. Up to now, some analysts had worried that Sky had no answer to the emerging broadband television market, which allows consumers to call up programmes when they want.

This week, Sky will announce the new broadband TV offer, which will be available free to its premium customers. As a satellite broadcaster, Sky has always suffered from the lack of a "return path" which would allow the customer to communicate back with the company. The Sky decoder box, used to receive its signal, does take a phone line but this is used for relatively unsophisticated services, such as paying for transactions and video games.

The Sky broadband offer will be available to customers with the most expensive subscription packages - this covers over half the company's 7.7 million customers.

It will enable consumers on the very top Sky World subscription, costing £41 a month, to watch any one of 200 movies at will, and also the option to call up various sports programmes. Other premium packages will get either the sports or the movies.

To use the service, consumers will need to have a computer that is hooked up to a broadband internet line. The programmes can then be watched either on the computer or played through a television.

However, the need to access the service through a computer does make it less "user friendly" than the video-on-demand available from cable or TV telephony companies, such as Home Choice.

The broadband offer is likely to evolve into a wider and more sophisticated service over time. Sky is aiming to get into 10 million homes by 2010.

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