Platform Lessons from BSkyB

BSkyB's platform shows a multi-sided business model in action, bringing value to both upstream and downstream customers and earning decent returns for shareholders.

BSkyB is probably the most misunderstood publicly quoted company in the UK. Most analysts view them as a media company; our theory is that BSkyB is a platform company and comparisons to Apple, Microsoft or Google are more appropriate than UK media players such as the BBC, ITV or even potential new entrants such as BT.

bskyb1.png Figure 1: Sky Delivery Platform

Here are five rules to being successful in the platform game:

Rule #1 - You have to keep loading extra features onto your platform...

Microsoft historically were tops at this - Windows for some grew fatter and fatter release by release, but in reality every release contained new features that appealed to some. BSkyB have done the same - they moved from analogue to digital, introduced interactive TV, took PVRs to the mass-market, and now are doing the same with HD-TV. As soon as that is complete ,they will move onto the next thing - 3D TV or even true on-demand VOD.

BSkyB seem to be one step ahead of the competition all the time. The only exception to this is Virgin Media networked VOD service, which is far superior to the BSkyB limited caching of programmes to the Sky+ device - currently a big hole in the portfolio. Notice that BSkyB is totally agnostic whether the features are driven by hardware, software or network - their platform contains all three elements.

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