UK's Sky launches new premium TV service

By Paul Sandle LONDON (Reuters) - British pay-TV company Sky launched a new premium TV service called Sky Q on Wednesday, aimed at households wanting to watch programmes on several screens at the same time, while seeing off the challenge from services like Netflix. The new service, which requires a new set-top box and a broadband connection, enables viewers to watch shows on up to five screens simultaneously while also recording up to four other channels, the company said. Chief Executive Jeremy Darroch said the new box was the "biggest re-imagining" of Sky in its history, and it would offer the best Sky experience to both existing and new customers. Pricing of the new service was not disclosed, with Darroch saying it would be announced nearer to the time when the boxes are made available early in the new year. However, he said last week there was an opportunity to raise prices in Britain. "We want to do that behind innovation, behind improved service, behind improved content," he said at an industry investor conference in Barcelona. Sky, which has 12 million customers in Britain and Ireland, faces fierce competition in the pay-TV market from cable operator Virgin Media and telecoms giant BT, which has raised the stakes in bidding for sports TV broadcasting rights in the last three years. In the meantime internet-based media providers like Netflix and a recently upgraded TV service from Apple have also entered the market. Sky, which is 39 percent owned by Rupert Murdoch's 21st Century Fox, has proved resilient however, continuing to grow its subscriber base, while the rate of customers switching services has edged lower in recent years. Sky has widened its offer over the last decade, so customers can now choose between an array of packages starting at six pounds a month and rising to about 70 pounds for its bundles of sports, entertainment and movies. The new service will launch in Britain and Ireland, with Germany and Italy in development. It will also be ready for ultra high-definition broadcasts, which will start next year, it said. It includes online services like YouTube and music videos from Vevo, as well as Sky's on-demand movies and entertainment service but not rival internet-based services like Netflix and Amazon Prime. "From a user perspective (we) think this could be a further driver of loyalty/advocacy which would drive better growth for the core platform via better retention and more robust pricing," said Citi analysts. (Editing by Angus Berwick, Greg Mahlich)