Coming back from my summer holiday I was greeted by the news that Sky had launched - on PCs, Macs and some Android smartphones - its new broadband movies services, NOW TV. (Here's the official press release in case you haven't seen it.) I'm a little late to the party on this one so instead of writing my own analysis I'll summarise some of the industry comment that's already been made about this story and try to provide some context.

In that vein I think it's worth stepping back and taking a look at the landscape that NOW TV is joining.

# The DTT Market

First, here are the companies that have the biggest share of the DTT (digital terrestrial television) market and Sky's place in that list.

The BARB website tells us that there are 26 million television households in the UK. The market share figures below are based on that number:

(Sources for these figures are at the bottom of this story)

# The SVOD Market

We can also take note of the two biggest players in the SVOD (subscription video-on-demand) space. Lovefilm had two million active subscribers as at 9 January 2012. Netflix, unfortunately, doesn't publish specific numbers for its international territories but, based on its first quarter 2012 results (which say that the company had 3.07m international streaming subscriptions - up 65% from the previous quarter) we can surmise that the absolute maximum number of UK subscribers is 1.86 million - and that's if ALL the non-domestic growth was only in the UK which seems extremely unlikely.

# Industry Reaction

So that's the background and here, as promised, is a digest of some of the industry reaction.

In an email dated last Friday, Enders Analysis says that

"NOW TV addresses the growing opportunity for broadband TV, primarily appealing to the 8 million non-pay-TV households that have broadband - the same target audience as Netflix, LoveFilm, BT Vision and YouView. We expect NOW TV to have only incremental impact on Sky's financials, but it has the potential to put Sky in pole position in the nascent market for over-the-top TV."

I'm not an Enders reports subscriber so I can't give you their full rationale but as Emma Wells, Marketing Manager at Red Bee Media points out in her blog post (dated 17 July)

"Launching Now TV is less risky than it first appears. Given the mounting evidence that viewership of video online and on mobile devices is not diminishing the appetite for watching television, Now TV seems unlikely to cannibalise Sky's pay TV model.

The pay-as-you-go service targets a new market segment, and acknowledges that "not everyone is seeking a permanent, paid deal.""

Wells also cites research that suggests

"… the UK television industry expects online video services to fuel significant industry growth in the coming years - with annual revenue from pay online TV services  predicted to quadruple by 2020. Perhaps if Sky don't cannibalise their own monthly subscriptions, someone else will."

Over at paidContent, Robert Andrews writes that the launch of NOW TV "is only a partial and low-risk debut version of what, in time, could become a significant, era-defining strategy for the operator." He goes on to say that it's a "brave move" for Sky since "Now TV will stream the same programming over a range of internet devices instead of satellite, and for flexible monthly and pay-per-view fees instead of an annual monthly contract."

Andrews also quotes Ted Hall, a senior analyst at Informa, who wonders if NOW TV could backfire on Sky:

"Now TV represents a potentially dangerous move away from the bundled approach to selling pay TV … towards an a-la-carte model. Consumers are finally being introduced to the cherry-picking model they always wanted. The allure of such freedom could be stronger than Sky intends. What started out as a defensive move against the new OTT players in town could backfire if cannibalization of its core business takes hold. The key will be to keep Now TV on a leash."

Hall says much the same thing in a piece on the Hollywood Reporter website and there's a projection by Barclays Capital Markets analyst, Julien Roch, that

"both LoveFilm and Netflix will end 2015 with 2.5 million subscribers and Now TV with 1.0 million. We believe that 2012 will be the year that Internet TV takes off in the U.K. as the evident success of existing players, such as LoveFilm is complemented by the launches of Netflix, YouView, BSkyB's NowTV and potentially Apple's iTV,"

If you didn't already have this conversation last week, what do you think about the launch of NOW TV? Add your comments below.

Sources for the DTT stats

Freeview: http://www.freeview.co.uk/Press/2012/Freeview-HD-Sales-Pass-Four-Million-Following-Surge-in-Q4-Sales

Sky: http://corporate.sky.com/media/key_facts_and_figures.

Virgin Media: http://investors.virginmedia.com/phoenix.zhtml?c=135485&p=irol-financial-results

BT: http://www.btplc.com/news/articles/showarticle.cfm?ArticleID=a70ac077-fe85-4fa9-911d-04b342c44ae4