Must be the music, because Sky Songs is set to close
Sky had high hopes for its music streaming service, Sky Songs, when it launched last October. It promised customers access to millions of songs for a low monthly view - as low as the likes of Spotify - and with an existing customer base of 10 million to market the product to, it should have been a no-brainer.
Despite this, Sky has announced the service will end in February after been "unable to reach a large enough customer base" - despite the backing of the four major record labels, and despite constantly cutting the price of the service over the past year; Sky Songs cost just £4.99 a month for unlimited streaming of five million songs before it was axed.
We've taken the difficult decision to close Sky Songs. Although we are extremely proud of the service we built and the experience it offers, we just didn't see the consumer demand we'd hoped for," a Sky spokesperson told the Guardian.
Why didn't it work? Sky Songs didn't go down the Spotify route of offering a free service supported by ads; customers either paid for the service or they didn't get it, an instant turn-off when freemium rules. The free model may not have directly created large revenues for Spotify, but it has generated massive awareness through word-of-mouth, in turn creating loyal users (and therby increasing advertising revenues) and Premium customers.
As well as there being plenty of established streaming-only services in the market, Sky have perhaps misjudged their target audience. "We want millions of homes using this regularly," said Sky at the time of the launch, but it isn't a "home" that will consume music. A household may subscribe to Sky TV because television is a service still considered an essential utilitiy by the majority of families - it's often consumed as a family unit. A home won't gather around a computer to listen to music; it's very much an individual's decision where and when they source music and how they listen to it.