(Bloomberg) - British Sky Broadcasting Group Plc (BSY) will start an Internet-television service to gain new customers outside its traditional satellite offering after winning fewer TV clients in the second quarter than estimated.
The U.K.’s largest pay-TV broadcaster will start the movie offering in the first half of the year to help it compete with online-streaming rivals Netflix Inc. and Amazon.com Inc. (AMZN)’s Lovefilm. BSkyB, based in Isleworth, England, added 40,000 TV clients in the second quarter, it said in a statement today. Analysts in a Bloomberg survey had estimated 59,400.
“It’s a very quick and sharp response to the Netflix launch and an indication that management is extremely pragmatic,” Claudio Aspesi, an analyst at Sanford C Bernstein in London, said in an interview.
BSkyB, with more than 10 million subscribers, is facing increased competition from Internet TV offerings after U.S. streaming-service Netflix started offering movies and TV shows in the U.K. this month. BSkyB is also trying to distribute more content on mobile phones and games consoles, outside its traditional satellite transmission.
“Lots of people see an opportunity” in Internet TV, Chief Executive Officer Jeremy Darroch said today on a conference call. “I don’t see it as a threat to our business at all.”
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