With all the new online services who will survive?
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With all the new online services who will survive?

In an unexpected move, Tesco bought the UK VOD company Blinkbox. Tesco’s are well-known to branching out from simply groceries – this week they were talking about offering mortgages to their customers soon – but is this one move too far?

My thoughts are with all these VOD services, will the public migrate from their traditional viewing habits as these VOD operators are hoping. Sky recently launched Sky Anytime+ which features lots of on demand programmes on their new HD boxes tailored to the subscriptions. Before this, the only service providers offering VOD on TV was Virgin Media and BT Vision. Customers have adapted well to viewing on their PC’s with the likes of the BBC iPlayer but this hasn’t dented BSkyB’s impressive 10m subscribers one bit.

When you look at the online services, such as Blinkbox, there are quite a few players now in the market: Lovefilm (bought by Amazon recently), SeeSaw (owned by transmission specialists Aquiva), and Vudu (which Wallmart bought last year). Working in TV myself I can tell you that buying up content for these online services is very expensive. Getting exclusive content, considerably more so. Sure all the aforementioned companies have deep pockets but at what point will they walk away from the picnic?

BSkyB’s Anytime+ service is crammed full of exclusive content linked with their exclusive deal with HBO, plus film studio deals boasting deals that prevented their competitors from showing films when Sky weren’t in a position to show them on-demand themselves. Now they are though and the Anytime+ service is a reason for the other guys to start to worry. For instance, Virgin Media sold their channels (Living, Bravo etc) to BSkyB so they could change their focus on building an on-demand product for their customers. Again, BT Vision’s main selling point has been on-demand programmes – including an HBO-branded section in the EPG. Now Sky has taken the HBO programming away and on demand is now widely available elsewhere how will they respond to this new threat from Sky?

Sky already offer a good selection of their programming online through their Sky Player service so they are doing a very good job to cover their bases. So if this is the case, and they continue to lock in exclusive studio deals – don’t forget the 20th Century Fox connection – then the acquisition of Blinkbox by Tesco could well prove to be a purchase of a great product but without any major content. A battle between Britain’s biggest most profitable retailer and Britain’s most profitable broadcaster could may be on the cards before long.