Sunday 14 August 2016 8:20 pm

Sky plots Spain launch as online TV war escalates

The battle for control of the growing online streaming market is heating up as Sky prepares to launch Now TV in Spain.

It’s understood Sky plans to use Spain as a springboard in to other European markets if the Spanish launch is a success.

Now TV will be competing directly with US streaming site Netflix in Spain with online retail giant Amazon expected to bring its Prime Video service to the country in coming months.

Spain, along with Italy, is thought have potential for extensive growth in the pay TV market. Only 27 per cent of Spanish households subscribe to a pay-TV service, while in Italy penetration is as low as 22 per cent.

In the UK almost two thirds of households pay for TV. Sky’s UK growth has slowed in recent years as competition from the likes of rival BT increases.

On-demand services have also grown rapidly in the UK. About a quarter of UK households now subscribe to an on-demand streaming service, recent research from the Broadcasters’ Audience Research Board showed.

Globally Netflix has increased its lead over its rivals in the sector. It grew its user base by 1.4m between 2014 and 2015, far out pacing the growth of both Sky’s Now TV, and Amazon’s Prime Video.

Sky is already working to grow its Now TV subscriber base in Germany and Italy, where it also provides its traditional, more expensive, satellite operations.

Earlier this year Sky rebranded Sky Movies as Sky Cinema, falling into step with its markets across Europe – Germany, Austria and Italy – which were merged into one pan-European network last year.

A rise in competition from the likes of Netflix and Amazon, which are fast ramping up the level of content available on their online platforms, means Sky has come under pressure to maintain market share.

Sky’s share price has fallen by over 20 per cent from its peak in the summer of 2015.