Sky launches video-on-demand service

Sky Television has unveiled a new subscription video-on-demand service that will be free for MySky customers and available for one-off purchases on tablets and mobile phones by non-Sky subscribers.

Chief executive John Fellet is negotiating a name and finalising eight rights deals for content. It was expected to be up and running in the fourth quarter of 2014 and would stand alone.

Content for the subscription video-on-demand service (SVOD) would include material that appears on Sky's Soho channel as well as recent release and library material on movie channels. It gave consumers the option of watching content without paying the subscription for full linear channels, Fellet said.

The deal continues Sky TV's close relationship with Vodafone which will bundle the service with its own TV offering, which is linked to the Sky linear service.

Telecom is to unveil its subscription video-on-demand service soon but Fellet said the announcement was brought forward to respond to industry rumour rather than pipping Telecom to the post.

While SVOD is available through Quickflix and some consumers can illegally obtain US service Netflix from US servers, the arrival of a corporate in the market marks a significant shift.

Pricing was still being resolved through market research.

There has also been speculation the expanding Netflix SVOD has been trying to buy New Zealand and Australian rights to content.

Fellet said Sky aimed to be profitable on the new service within three years.

Fellet declined to comment on speculation that Sky intended to buy the internet service provider Orcon.