5 Sky challenges facing TV’s new boss
1 Direct-to-the-consumer streaming services
First came Netflix, offering a range of content. Now Hollywood movie and TV studios are starting to launch their own apps. Exhibit A is Disney+, which Disney launched last year, pulling its content from traditional players like Sky at the same time. Others will follow, such as HBO Max.
2 Direct-to-consumer sports streaming services
Pre-Covid, the English Premier League was planning to trial a global service that it billed as ‘the Netflix of football’. That sort of model is already being deployed by various US sports bodies. The answer will be to keep a lock on local sport — though that could be complicated by challenge number three.
3 Amazon, other giants starting to stir
Jarden is picking that Spark will eventually exit sport, just as it exited entertainment by selling Lightbox to Sky. But even if the wealth manager is right, global giants Amazon, Facebook and Google are experimenting with cherry-picking local sports rights in various countries. Successful bids or not, they always drive up the price.
4 Declining revenue per customer
Sky added customers for the first time in years in FY2020 as the number of its streaming customers (who grew from 160,000 to 404,000) expanded faster than its satellite base contracted (which fell from 619,000 to 585,000). But revenue still contracted and profit disappeared because the average stream spends $19.80 per month, while the average satellite customer forks out over $82.08.
5 Succeed in broadband
Sky Broadband — a UFB fibre service — is in trials ahead of a commercial launch next year. Sky plans to use cut-price internet to keep customers loyal to its content and to upsell them to more channels (or streamed content). Partner Chorus will get a cut. The company has said its broadband will stand out in a crowded market for its better quality of service — but that’s proved easier said than done for other contenders.