When I first heard the rumours about Sky Glass just before its launch in October 2021, I was really quite surprised and I have to say a bit confused. Sky was about to launch their very long-awaited and anticipated Sky Q over IP product and it was not a set-top box but a whole television. What’s more is that it wasn’t actually part of the Sky Q ecosystem. It took me a couple of days to recover, reflect and realise the strategic brilliance behind this bold move. It positioned Sky against their future competition pivoting away from the battles with their past competitors.
In the UK we had been waiting for what was known in the industry as Sky-over-IP for a very long time, almost 5 years. It was first announced in by Jeremy Darroch, then CEO, back in January 2017, with a launch date set in 2018.
Much of the discussion and debate following the announcement had been around how the announced Sky-over-IP fitted with Now TV (or just Now as it now is). Given that Now, Sky’s low-cost offering launched in 2012, was delivered over IP, how would a Sky-over-IP offering be differentiate from it. Now, was and still is positioned as a low-end product aimed at consumers who Sky were not able to get to take a full fat subscription. Its pricing just doesn’t make sense as standalone proposition, though fine as incremental. If too many consumers opt for Now it would destroy Sky’s economic model.
The other discussion point around Sky-over-IP was its expected form factor. Would it be a puck, stick or even a box? There had been no thought, at least amongst the people I was talking to, that it would be a whole TV. As Sky Glass is it is neither a puck or a stick it is not easy to compare it with Now.
With Sky Glass, how you get the Sky service, be it via satellite or IP, has become an irrelevance, as no one is looking (both physically and metaphorically) at the cables because they are looking at the screen.
But the real brilliance is not how it deals with Now comparisons it how it positions Sky for the future. What Sky Glass recognises is that Sky’s future is as a super aggregator.
Sky as a Super Aggregator
Sky don’t directly license all the content and sports rights that they deliver but aggregate more and more of their content from other providers, key examples being Netflix and BT Sport. The list is growing as new streaming and direct-to-consumer services emerge.
Sky have to have a strategy for if they lose the Premier league football rights, which underpins their market dominance for the last 30 years, either in a bidding war or with EPL deciding to go direct-to-consumer. I don’t think either is likely for a couple rights rounds. But it they did lose them they would want to have the main platform through which the new owners would deliver the service.
There are two undeniable truths about TV; first is consumers want simplicity, one remote, one user interface and as few cables as possible. This is something Sky Glass delivers with spades on.
Second, is content owners want to reach as large an audience as possible and will launch their services on the platforms with the largest customer base. Something Sky certainly has, second only to Freeview in the UK.
As a super aggregator their main competitors are not their traditional competitors such as Virgin and BT, or the new streaming services like Netflix and Disney+, but actually the TV manufactures such as Samsung and LG.
A lot of cord cutting or cord shaving, comes from people access streaming services directly on their TVs.
If Sky had launched their Sky-over-IP service as a box/puck proposition it would have just been another device vying for a HDMI socket, on a TV which would have much of the same content accessible directly from its own UI.
Keeping subscriber happy and your services at the front of their minds is difficult when you have reach them through someone else’s interface.
Worth noting that Amazon is becoming a TV manufacture so is likely to be in that last category rather than the second. They already have Fire TV embedded in a number of third party TVs and are reported to be launching their own brand TV.
A possible push back against Sky Glass is, why would you buy a TV that requires a subscription to work properly, when you can buy a perfectly good one that doesn’t. Well if we are talking about core Sky subscribers, then they are quite use to (if not entirely happy) paying for their Sky subscription.
Where consumers are really going to benefit is in regular and on-going software updates. One of the problems with smart TVs has been their inability to evolve once in consumers’ homes. The big 4 TV manufacturers launch new models each year and typically only maintain the software in their TVs while it is being manufactured, so only in the year it is launched. Margins for TV manufacturers are extremely tight and they just can’t afford the size of software engineering teams to maintain multiple years of software. They also don’t have the support structures in place if a change causes a problem or just annoys their consumers. The number of services available on a specific smart TV model is reducing over time due of software incompatibility and the user interface of smart TVs are stuck with the paradigms they were launched with. Now, the solution to this (if you are not ready to buy a new TV set) is a streaming stick stuck into an HDMI port, but this means another remote control and multiple user interfaces – breaking the simplicity rule.
This should be different for Sky Glass. Sky won’t be trapped in the yearly TV launch cycle driven by CES, but also they will have the subscription fees required to keep the necessary software engineers in Coke Zero to maintain their software for longer. Sky are also motivated to continuously evolve the Glass user interface to maximize consumer usage and satisfaction, to keep their subscription fees coming in.
Sky Glass has not been without problems. Some early adopters complained about screen flickering and playback problems. It was to be expected bringing together Sky software and the underlying TV software stack was going to be a challenge, something the big TV manufacturers have been perfecting for years. But resolution to these problems will juts be a software update away.
The TV sets are actually produced by TP Vision. Now if you’re not in the industry you may not know who TP Vision are. The simple answer is they are Philips. Remember them, they use to produce every sort of consumer electronics product under the sun, though these days the brand is mostly associated with electric toothbrushes.
In 2011, Philips sold 70% of the company to TP Vision, with the remaining 30% transferring in 2014.
Many years ago, Philips was quite a significant TV manufacture for the UK market, certainly in the top 5, but they reacted to falling sales during the transition to flat screen TVs by withdrawing from the UK market and the brand has never been successful in getting back on UK shelves. What this means is while other TV manufacturers (e.g. Samsung, LG, Sony) would have a lot to lose by making Sky Glass, TP Vision/Philips don’t.
Additional Points of Interest
A couple of points to note about Sky Glass.
- It is available in multiple colours, an Apple like move, it will be interesting to see if this lasts.
- It has a sound bar built into it. This means is really delivers on reducing the number of the remotes and cables. But does mean it is much thicker than the latest smart TVs from the likes of LG, Panasonic, Samsung and Sony.
- Alongside Sky Glass you can get a free Sky streaming puck which has the same Sky Glass UI. With a whole home Sky subscription you can have 6 pucks, with the additional pucks being £50 each, in addition to 3 Sky Glasses.
- It is not compatible with Sky Q. You can’t extend your Sky Q in home ecosystems with Sky Glass or its puck. To have integrated them together would have made the software even more complex. They could be integrated in the future, but it may be valuable to Sky to keep the propositions separate.
- Sky Glass has an aerial input that can be used to receive Freeview channels as a backup. Though this only works if your internet connection isn’t working. Looks like Sky are keeping their options open here. It is not clear what happens if your Sky subscription expirers as no one has had a Sky Glass long enough for that to happen.
- The is no PVR feature. Instead, Sky have come up with playlists that work much like the Sky+/Q planner, with series linking maintained for what are essentially deep links to the on-demand services. This is something I’ve described in the past as the future of PVRs, though at the time my pitch was for the PSBs to adopt this as part of Freeview Play.
My first prediction is that Sky Glass will be a success, I expect it to be a bit marmite, some people will love the simplicity while others will complain about how limiting the offering is.
Sky Glass will not mean a sudden end to the satellite dish, though it does mean that Sky over satellite will end at some point in the future. Industry pundits always predict the quick demise of one TV service when a new one emerges, but that demise takes a long time in reality. Sky HD was launched in 2006, 15 years on Sky has not yet terminated its SD services.
I also predict that Sky will reduce the number of colours they provide, though Sky might keep the ideas of custom colours through clip on surrounds.
Sky will increase the range of TV sizes and the range of UHD technologies, expect a Sky Glass Pro in April, based on TP Vision 2022 technology.
The TV manufactures will copy Sky, in enhancing their UIs, offering a wider range of colours (for a year or 2) and building sound bars into their TVs. This last point is a challenge for them as the margins on sound bars are much higher than TVs, so the upsell of a separate device must be important to their overall economics.
The PSBs through Freeview Play will copy a number of the Sky Glass features, in particular it has signalled the future of PVR.
The concept of network PVR will slowly decline in favour of the playlist model developed for Sky Glass. This overcomes a lot of rights issues and gets us use to watching ads again. I believe ad skipping is enabled on Sky Glass but will become a paid for feature in the future.
My final prediction is that the Sky Glass and Sky Q ecosystems will not technically be combined and that Sky will transition all of their focus onto the Sky Glass technology. However, as part of this transition they will enable the two technologies to co-exist under a single subscription.
I would love to know how and where the idea for Sky Glass came about. Was this a single genius working in the bowels of the Skyplex, a series of excellently chaired brainstorming workshop or was developed by an external consultancy. Whatever the source of the idea, I believe it is another example of Sky pushing the global TV industry forward and giving us a view of the future, much as they did with Sky+ in 2001.