Reaching for the Sky

Q: Xbox users in the UK have been clamouring for something that's a broad equivalent of the Netflix service in the US - would you say this deal with Sky is that equivalent, or does it go one step further?

Jerry Johnson: It's a ground-breaking thing that we're doing over here with Sky - it's a tremendous parnership for both of us. The ability to bring not only video and movies on-demand but the breadth of content that Sky provides - lifestyle, news, kids, documentaries and general broadcast-type content - is unmatched... not just here in the UK, but as far as console experiences go, nobody else is doing this, and no other country is doing this on the Xbox.

So we're leading in the UK by bring both that video on-demand and live streaming content, interactive sports... they're all things we'll be doing first over here in the UK.

Q: The demo content shown at the launch event here is in HD, but the product that launches will be streaming - so will that level of picture quality depend on the individual user's broadband connection speed?

Jerry Johnson: Right now we're using the SkyPlayer, and if you look at that it really sets the benchmark in terms of expectations. Right now we're saying it's going to be standard definition broadcast-to-DVD type quality.

Yes, some of the demo is in in high def, but that's mainly because we were putting it up on larger screens to present well. But we're always going to be evaluating how we continue to grow and give users choice on the type of content they get - not just the type of content, but the breadth.

Q: Why choose Microsoft and Xbox for this partnership?

Adrian Pilkington: I'd say that the brands are very similar, the approach is very similar. Obviously Xbox has a huge installed base, and a huge connected installed base. Also, it gives us a great opportunity to push the SkyPlayer and present our content in a very attractive way - and then add additional features, such as interactivity, more information, and it's really exciting for us.

Q: The SkyPlayer has now launched on the PC and Mac platforms, and the programme guide is being upgraded on Sky boxes now - did that influence the look-and-feel of the Xbox-based Sky content?

Adrian Pilkington: No, I don't think so. The thing you have to realise is that you're using a game controller rather than a TV remote, and Xbox users are used to using certain templates, and in certain ways. I think we want to have a balance between retaining the SkyPlayer brand and maintaining the user interface and consistency that Xbox users have with their current console.

I think the really interesting thing about the demo is that it fits extremely well - it's very intuitive and a great way to navigate, search and look for content, so we've got to be happy with that.

Q: How long has this deal been in the works?

Jerry Johnson: The partnership has been underway for well over a year now - it's probably about 18 months that we've been working together. My background is in working for the team back in Redmond on the global product.

When we shipped the updated interface in November it gave us an opportunity - it wasn't just an interface update, it was an architectural update on the back-end that allowed us to start doing things in a more modular way. It allows us to do more distributed development targeted at markets.

So from a technical perspective we've been working on this since before NXE shipped in November - it isn't just something that just all-of-a-sudden happened. We've now got a dedicated team made up of Europeans that have been hired in working on this project in London together with the SkyPlayer team.

Q: So did this project actually influence the design of the NXE?

Jerry Johnson: I think there are a lot of similarities between the things that we wanted to do. I would say yes, there are aspects of this that have influenced both of them. If you take a look at the way the interface looks now, it's very much Xbox. But if you start to look at the EPG, the fonts, it is distinctively Sky.

There are aspects of this Sky application now that you won't see anywhere else, you won't see them in other types of applications. It's the way you bleed together the things that are familiar about the platform you're on with the way that you consume that content that actually creates a pleasing and great user interface, and user experience.

Q: You'll be unveiling subscription packages and charges later in the year, but what's the overarching business model for this - does Microsoft stand to take a cut of new Sky subscriptions driven through the Xbox platform?

Jerry Johnson: Right now what we're really focused on is talking about the user experience, we're not really going into any of the commercial terms, so I don't want to speculate or put anything out there that would insinuate a certain commercial model.

Q: Is there an expectation of bringing new users to Sky via the Xbox platform?

Jerry Johnson: I believe that both of us, when we bring these products together, there's a broadly-appealing set of content that's going to bring new users to the Xbox platform. At the same time we're going to be introducing interactivity and bringing a very passionate group that's into competition, into sports, into the console, that before might not actually have been a Sky customer.

So I think that there's a strong overlap, and also a strong reach that we get from both of our products.

Adrian Pilkington: I think if you look at TGI data, the crossover between Xbox ownership and Sky subscription is extremely high, so there's already a strong affinity between the two brands. But I think that also gives us really good hope that we have the opportunity to allow Xbox owners who aren't Sky subscribers to reappraise the service.

Q: You say there's a strong overlap between Xbox owners and Sky subscribers - if they're already subscribers then they'll also have a set-top box already. You must have done the research, are there any numbers you can put on your expectations of take-up?

Adrian Pilkington: No, we can't give any numbers on that, but broadly-speaking the deal with Xbox allows us to give great additional utility to give existing Sky customers and Xbox owners. It's fantastic that you've more flexibility in terms of how and where, and the manner in which you watch your content.

Yes, if there are opportunities for us to increase our subscription base, even better.

Jerry Johnson: It is about reach, but it's also about engagement - not just for new consumers but also existing consumers. For myself I have Sky HD at home in a set-top box, and I can tell you that when the service launches, if you've got an Xbox in the bedroom, it's another way to enjoy that Sky content.

I think it definitely has an aspect of reach, but definitely an aspect of engagement by existing customers.

Q: Sky already offers a multi-room service, but individual Xbox owners will vary in terms of where they have their console - is there any concern that Sky on the Xbox 360 could eat into the existing multi-room revenues?

Adrian Pilkington: The SkyPlayer that's online at the moment - in order to have access to the channels you have to have access to multi-room to qualify.