Sky takes a punt on internet TV

Illustrating the competitive nature of the UK's pay TV market, Sky announced last week that it intends to branch out with the launch of its own internet TV service.

Known as NOW TV, the service will be available on a subscription or pay-as-you-go basis and will represent an entirely separate proposition to the satellite broadcaster's regular pay TV products, such as Sky+, high-definition TV and Sky Go.

Interestingly, NOW TV will carry no prominent Sky branding, a decision that analysts believe is designed to reduce potential customer confusion about the provider's different services.

It will offer subscribers the chance to choose from Sky's catalogue of hundreds of movies, while additional content - including sports and entertainment - is also in the pipeline.

With the proposition due to hit the market this summer, it's obviously still too early to tell how popular it will prove. There's plenty of competition in the streaming sector, with the likes of LOVEFiLM and Netflix already offering similar services.

However, one thing's for sure - Sky certainly has the content and financial clout necessary to succeed where others would fail.

Although Netflix and LOVEFiLM have both succeeded in acquiring the rights to blockbuster movies, they're still nowhere near offering as extensive a catalogue as Sky.

If the pay TV giant gets its pricing and promotional activities right, it could see major benefits from NOW TV.

Jeremy Darroch, Sky's chief executive, pointed out that around 13 million homes in the UK haven't signed up for pay TV and that this new service could be an effective way to reach out to this extensive demographic.

Should Sky achieve its goals with NOW TV, it will be interesting to see if its largest rival in the subscription TV market - Virgin Media - opts to follow suit.

Whatever happens, it's clear that internet TV is here to stay and looks set to become increasingly popular.

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