Sky plans to build its on-demand offering and OTT offerings in Germany and Italy on the model of what has been achieved in the UK, and potentially launch download-to-own services in those markets, while introducing the Restart services provided to Italian Sky customers in the UK later this year.
Sky CEO Jeremy Darroch, speaking at the Deloitte, Enders Analysis and BNP Paribas-hosted Media & Telecoms Conference yesterday, said that on-demand had been a massive success for Sky UK, with pay content outstripping free to air by a ratio of two to one. He said that about a third of Italian customers had connected their boxes to the internet so far, compared with two thirds in the UK, while connected boxes are at a much earlier stage of development in Germany.
He said that Sky would launch the Italian restart service in the UK later this year: “One of the most popular features among our Italian customers is called ‘Restart’. It’s a simple but very clever idea that allows customers to go back to the start of a movie. We’ll bring it to the UK later this year – just one easy example of sharing best practice across the group.”
On OTT, he said Sky had successfully reached a new group of customers in the UK and that “plans are well underway to push OTT further through all of our markets”.
“Sky Online, an equivalent product to NOW TV, has launched much more recently in Germany and Italy. In each market, the plan is to make our own streaming box an important part of the offering, building on the success of the NOW TV box in the UK,” said Darroch.
Darroch said Sky’s connected platform was also allowing it to tap into entirely new revenue streams such as download to own, where the Sky Store service is among the top one or two digital blockbuster retailers and has turned in revenue growth of 90% year-on-year. “We are exploring the potential to roll out in other markets,” he said.
Darroch said that Sky’s international scale would give it much more room for growth as well as to sell additional services to existing customers across all its territories.
“First, we will exploit the substantial headroom for pay-TV growth across our markets. With more than 60 million households to go for, the potential here is very attractive. Building on the strong demand we see today, we will use the combination of DTH and OTT services to target different groups of customers and open up new areas of growth,” said Darroch.
“Second, we will use our strengths in cross-selling to bring more products to existing customers everywhere. All the evidence is that customers have a strong appetite to take more from Sky. And we see significant scope to go further, whether in TV, communications or transactional services.”
Darroch said that Sky would also grow its adjacent businesses, including advertising, programming sales and third-party channel distribution.
Sky plans to up its investment in entertainment content, said Darroch, citing existing examples such as crime drama Fortitude and Italian crime show Gomorrah,along with its exclusive partnership with HBO.