Where next, Sky?

The industry believes that Sky will be overtaken by Freeview as the primary digital platform, by Christmas 2005 - set top boxes are flying off the shelves.

The success of the ITV Digital replacement has been noted in this blog plenty of times, but in reality it was always likely to take over Sky at some point - digital terrestrial television (the platform that Freeview is part of) was destined to be the replacement for analogue television, and become the default system in the UK.

Whilst Sky has always made a big deal about how it's going to get the entire world subscribing to its services, comments like that are ultimately made to make shareholders happy and many pundits believe Sky is getting closer to saturation point - the limit at which it simply isn't going to grow its business any more.

According to Ofcom research, Sky added just half a million subscribers between the end of summer in 2003 and the end of summer this year - and it has a big question of how many more it can keep adding, whilst trying to extract more and more money from its subscribers. The company has a current target of £400 a year in revenues, per user - and its not far off now.

That in itself leads to an important question - at what point does the amount of money they manage to make off people become so much that new subscribers are put off, and existing ones head for the cancellation?

And if that does happen, how do they plan to fight back, especially in a land that's increasingly seeing a future that's free to air?