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Research Reveals Sky’s Latent Weakness: Value for Money

by David Mercer | Aug 13, 2009

After another set of strong financials BSkyB has been showered with praise from financial and media commentators alike. As I indicated at the time, the vast majority of customers plan to keep spending – the same or more – on digital television, in spite of the economic gloom and uncertainty. Sky’s long established premium content and technology innovation strategies have apparently put the company into an invincible position. But delving further into our survey findings a Strategy Analytics report has revealed a key weakness in Sky’s competitive position. Satisfaction with the Sky service is generally strong, but Sky’s value for money ratings are the weakest of the major competitors. Overall we found that more than a third of Sky digital TV subscribers were less than satisfied with the value for money of this service, compared to a quarter of Virgin Media digital TV customers and only 7% of Freeview users. We also found significantly fewer customers of Sky, compared to those of Virgin Media or Freeview, who felt that value for money exceeded their expectations. Of course people could argue that we are comparing apples and pears, since Freeview by definition is a free-to-access service. Perhaps the few people who felt Freeview was not value for money thought that the price of the set-top box or TV set was too high. And it would certainly be interesting to rate Freeview against the value of the television licence fee (£142.50 annually), since most people probably do not associate the two as directly related. But as Sky itself recognises, Freeview does present a possible alternative for price-conscious TV viewers, even if Freeview’s range of content falls well short of what is available from Sky. And our survey suggests that Virgin Media, the other major pay TV competitor, has higher value for money ratings than Sky. This appears to be a sign of hope for the cable company as it seeks to become more aggressive in customer acquisition over the coming months. Twitter: twitter.com/DavidMercer_SA Client Reading: BSkyB Results Shine But Warning Signs Evident In Customer Value Ratings Add to Technorati Favorites
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