The Sky’s the limit
I’ve always been fascinated by the media. That’s just as well I suppose, as I run a reputation management firm. But I am constantly intrigued by its influence, its reach, the way it works – and always, always the stories going on behind the scenes. So it was a genuine pleasure to welcome Jeremy Darroch, the CEO of Sky, to my podcast, Media Masters, this week (listen here).
Jeremy’s an interesting guy, because he doesn’t come from a broadcasting background. He trained in economics, and for many years worked in finance for Procter & Gamble. It was that skill set that first took him to Sky; first as chief financial officer, then in 2007 as CEO, which is already extraordinary longevity in an industry that can all too often eat its own young.
The big story for Sky recently, of course, has been the takeover by Comcast. The American giant began the acquisition in the middle of last year, swallowing up Sky in stages after beating off a rival bid from 21st Century Fox, and in November it completed the deal by delisting Sky and making it a wholly-owned subsidiary. Make no mistake about it, this was a big-money deal: Comcast spent in the region of $50 billion buying Sky, which is a major investment by anyone’s standards. So I was keen to talk to Jeremy about the whole process!
Remarkably, perhaps, given the gargantuan investment that Comcast has already made, Jeremy said that the future is about growth. He identified, among his priorities, generating more original content; bringing together product development pipelines; and doing more, more quickly, on a global scale. He was very upbeat about the future of the company, telling me that “the best years of this business are ahead of it”, and emphasised that it was the reason why he’d chosen to stay on as CEO rather than look for a new challenge. It was refreshing to see such a senior executive retain his enthusiasm after a dozen years in such a big job.
As an avid TV watcher, I also wanted to discuss the enormous growth in pay-per-view TV. I binge-watch a lot of stuff on Netflix when I get the chance, as do lots of people, and I think the expansion of that sector has been really interesting to observe, because of what it says about the state of the market and the consumer appetite out there. Jeremy explained that, unusually for such a big sector, the pay-per-view market in Europe was really under-penetrated, meaning that providers had lots of “headroom” to expand. Sky has launched NowTV, its own Netflix rival, and it’ll be fascinating to watch how it fares against the established players. It’s a relatively young market, and, as Jeremy noted, there’s a degree of under-penetration, but it’s as cutthroat as any – and Sky will need to have the sharpest of sharp elbows to make themselves a space.
Another aspect of this that intrigues me is how the different providers in the marketplace are going to work together. Some kind of cooperation is essential, because consumers simply won’t accept silos any more; so on my Sky Q box, I can get Netflix, I can get YouTube, I can get Spotify. In an ideal world, I wouldn’t even notice what device was presenting me with the content, and it would be seamless. But it’s not that easy. I put it to Jeremy that Sky had two potential “frenemies”, Apple and Disney. The former leads the way in devices, of course: iPhones, iPads, Apple watches, MacBooks. And with Apple TV, they own the platform that you using to watch their content. And Disney, well, Disney are sui generis; they have the history and the heft to please themselves, to a large extent. Jeremy’s reply was nuanced. There would be times, he said, when Sky worked with other producers, and times when the competed against them. Essentially, it’s going to be a mixed economy, because that’s the way it has to be.
All in all, there’s a lot in Jeremy’s in-tray. We could have talked for hours. And this is all stuff which has a direct and intelligible impact on consumers. They’ll see the difference it all makes. I’ll watch with fascination, but, as always, my core belief is that the industry will eventually deliver what the consumer wants. Those who don’t will soon be out of the game.