When Netflix (Nasdaq: NFLX) rolled out its streaming service in the United Kingdom and Ireland earlier this year, it already was facing some competition. Amazon (Nasdaq: AMZN), in the form of LoveFilm, already had a toehold in the U.K., and broadcaster BBC had an established digital platform already in place.
Now, satellite-TV operator BSkyB has thrown its hat into the ring and is gearing up to go toe-to-toe with Netflix with its own streaming movie service that also will include its existing Sky Movies, Sky Sports and entertainment portfolio.
Unlike Dish Network (Nasdaq: DISH)'s Blockbuster streaming service, BSkyB says it plans to offer the service outside its 10-million subscriber base with no contract and "a wide variety of pricing options."
The move is aimed at reducing the impact over-the-top services like Netflix and Lovefilm are having on BSkyB, which added just 40,000 new subs in the most recent quarter, 19,000 less than analysts had anticipated, and nowhere near the 140,000 new subs it had in the same period a year ago.
Netflix CEO Reed Hastings has said he expects the service to attract "millions" of customers in the U.K. and Ireland. Lovefilm currently has more than 2 million subscribers in the U.K and Europe and the BBC's iPlayer and Channel 4's 4oD have been very popular with audiences.
But BSkyB chief executive Jeremy Darroch said launching a streaming service is an opportunity for the company.
"I don't see it as a threat to our business at all," he said. "It will give another choice to the 13 million U.K. households that have chosen not to subscribe to pay-TV. It will be a new way to reach out to consumers who love great content but have no need for the full range of Sky services."
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