British Sky Broadcasting Group Plc reacted to Netflix's recent emergence in the U.K. video streaming market with its Internet-television service, which is projected to become available next year.
In addition to increasing its competitive edge, BSkyB, the U.K.’s largest pay-TV broadcaster, will start the service in the first half of 2013 in response to adding fewer TV clients than had been expected.
“It’s a very quick and sharp response to the Netflix launch and an indication that management is extremely pragmatic," said Claudio Aspesi, an analyst at Sanford C Bernstein in London, in an interview with Bloomberg.
As competition in online-streaming grows, BSkyB must act quickly to keep up. After Netflix started offering its streaming services in the U.K. this month, BSkyB also started planning to distribute content through mobile phones and game consoles.
While BSkyB previously attempted to offer content through a wireless service it began selling through mobile-phone operators in 2005, it is now focused on selling services like Internet broadband and telephone subscriptions to existing clients, Bloomberg noted.
BSkyB may have to account for rising opposition, but its profits are higher than analysts had predicted. In addition to an 16 percent increase in operating profit, the increase in broadband product sales fueled an increase in earnings, the report said.
Despite BSkyB's presence in the U.K. market, Netflix CEO Reed Hastings is confident that Netflix will gain a significant market share within a few years.
