The British unit of America Online has joined forces with BSkyB, Rupert Murdoch’s UK satellite operation to offer Sky viewers online services via their TV sets.
The duo, who announced their alliance this week, will initially offer email and instant messaging facilities to pay-TV subscribers. Interactive programming services are expected to follow.
Both companies are aware there is considerable subscriber crossover – although neither knows the extent to which their customers subscribe to the other’s service, nor their identity.
The success of the joint venture hangs on whether BSkyB customers in sufficient number decide email and instant messaging are must-haves. No additional charge will be made for these services, revenues accruing from a percentage of standard telephone charges notched-up while online.
Industry observers believe the partnership likely to be of greater benefit to AOL, which is not thought to be profitable in the UK and trails market leaders BTOpenworld and FreeServe with a customer base of around two million. Sky, on the other hand, dominates the nation’s pay-TV market with seven million satellite homes, and is likely to see the alliance as little more than a source of incremental revenues.
The twosome also plan to cross-promote the other’s services when the joint venture is up and running.
Data sourced from: The Washington Post Online; additional content by WARC staff