Sky’s SoHo Surprise a Low Blow
The biggest surprise about Sky TV’s new HD channel wasn’t its premium content but its premium pricing.
Instead of bundling SoHo with its Platinum Movies package, Sky plans to charge all subscribers an extra $10 a month to receive the HBO-style channel from December.
Talk about making a sow’s ear out of a silk purse!
What on earth was Sky management thinking when it made this outrageous, shortsighted, cynical miscalculation to milk beyond belief the very subscribers who contributed to its annual profit of $120.3 million?
Launching SoHo was a chance for Sky to win over the sceptics and critics of pay-TV by saying, “We’re prepared to provide the kind of intelligent entertainment programming that free-to-air TV won’t.”
It could have been a glorious PR coup, delivering salvation to viewers fed up with FTA networks consigning quality drama to the scrapheap and showing Sky to be a good citizen broadcaster that had more than the bottom line as its benchmark.
Instead, by demanding a separate subscription for SoHo, Sky has jeopardised customer goodwill, heightened concerns about its digital TV dominance and tactical packaging of content, and risked cannibalising subscriptions for its other premium channels.
I certainly will be thinking about whether to continue my Platinum Movies package now that SoHo isn’t being bundled with it.
This has as much to do with affordability as time management: how much TV can I choose to watch in one week?
Adding SoHo to my monthly bill would see it top $150 – which is asking too much of subscribers in these recessionary times, particularly those who have supported Sky from the outset.
Sky has enriched the media landscape immensely, pioneering first digital TV, then PVRs and more recently HD TV, and for the most part given subscribers a good deal.
While sports fans might bemoan Sky gobbling up rights to all the major codes, the upside is far better coverage than FTA TV could have provided.
But early HD adopters have been left wanting, with only a handful of 1080i sport, movie and FTA channels since Sky went HD three years ago.
So have those subscribers desperate for content they can’t access on FTA and who desire more than simply second-tier channels stuffed largely with FTA re-runs (UK TV, Comedy Central, Vibe, The Box, BBC Knowledge) or cable-lite docos and reality TV.
Instead of stiffing these subscribers further, Sky should have made SoHo free to HD ticket holders or anyone with a Platinum package – just as BSkyB does with Sky Atlantic, on which SoHo is modelled, and Foxtel does with Showcase.
SoHo was a fantastic opportunity for Sky to reward HD customer loyalty and attract new subscribers who weren’t interested in its wall-to-wall sports or movies.
The latter strategy should succeed: as a $10 add-on for a basic subscription, SoHo is a bargain — and an example of how Sky needs to make its packages more flexible if it’s to build on its phenomenal 50% household penetration.
But if Sky were as serious about servicing discerning viewers as it claims, it would bundle channels like SoHo, Arts and Rialto in a unique package rather than charging extra for each.
In the case of SoHo, it’s hardly had to fight off competing bids to land HBO product.
Most of HBO’s content is too high-minded for FTA schedules and many of the series Sky has secured for SoHo, some through existing deals with other suppliers, will do double-duty on channels like Prime, The Box and UK TV.
So, given what SoHo offers in prestige and synergies, it’s not as if Sky’s had to pay a high price for the initiative.
Yet, for the time being at least, that’s what it’s demanding of HD subscribers — and it’s not a happy place to be.