Sky Deutschland ups the ante

To launch iPad app, invest in original German content

COLOGNE, Germany – Sky Deutschland has launched a multi-pronged attack to draw in more subscribers for its pay platform, including a dedicated iPad application and investment in original, German content.

Speaking to delegates at cable TV trade fair Anga Cable in Cologne, new Sky Deutschland boss Brian Sullivan said the company would launch a German iPad app by the end of the month, to coincide with Apple's roll out of the device here. The iPad service, which will initially focus on Sky's sports content, will come just in time for the soccer world cup, which kicks off June 11.

Separately, Sullivan said Sky would follow the lead of every successful pay TV operation worldwide and begin to invest in "original, local content." With Sky still bleeding red ink in Germany, Sullivan said there would be no action on that front this year but he expects in-house produced drama to be on the air by "the second half of 2011, at the latest."

If Sky Deutschland gets into production in a big way -- following the lead of French neighbor Canal Plus, for example -- it could mean a sea change in the kind and quality of TV made in Germany. Local producers have long bemoaned Germany's lack of a functioning pay TV market as a stumbling block in creating high-end fiction to compete with U.S. imports.

But first, Sullivan has to make Sky pay in Germany. The Munich-based pay player, in which News Corp. holds a 45.4% stake, booked an operating loss of around $350 million (€262 million) last year. Sullivan is forecasting a break-even by the end of 2010.

Sullivan used Anga to unveil several new German services aimed at enticing new customers. These include a 320 GB digital video recorder -- which Sky subscribers can begin leasing this month -- and a Multiroom offering whereby subscribers can rent as second set-top box for $15 a month ($12).

Sky also announced a co-distribution deal with regional cable provider NetCologne.

Under the agreement, Sky will be part of the cabler's triple play (TV, telephone, Internet) offering. NetCologne will handle billing while Sky maintains its direct relationship to the subscribers.

The deal is a direct strike at Deutsche Telekom, which has been growing its IPTV service Entertain, a Sky competitor, largely through packaging it in triple play offerings.

Sullivan said Sky is in talks with all the major German cable operators to work out similar joint distribution agreements.
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