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Netflix challenge spurs BSkyB to launch rival streaming film service

Facing with the streaming movie service launched by US company Netflix in the UK and Ireland this month, British Sky Broadcasting is to start its own Internet-television service .

The U.K.’s largest pay-TV broadcaster will will offer its first high-speed fiber broadband product from April. As well as Netflix, it will compete with Amazon’s Lovefilm.

The move comes after BSkyB's won fewer TV clients, 40,000, in the second quarter than estimated. Analysts in a Bloomberg survey had estimated 59,400.

“It’s a very quick and sharp response to the Netflix launch and an indication that management is extremely pragmatic,” Claudio Aspesi, an analyst at Sanford C Bernstein in London, told Bloomberg Business Week.

BSkyB, 39-per cent owned by Rupert Murdoch’s News Corp , has just reported increased profits (see Drum story) It has more than 10 million subscribers but the increased competition from Internet TV offerings such as Netflix is raising eyebrows..

BSkyB Chief Executive Officer Jeremy Darroch said in a conference call, that “Lots of people see an opportunity” in Internet TV. He added, "I don’t see it as a threat to our business at all.”

Sources: Bloomberg Business Week, The Drum

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