Darcey: Content King, others waste it online
February 4, 2011
By Colin Mann
Sky’s business model creates a “virtuous circle” that aids the broadcaster’s ability to innovate, according to COO Mike Darcey. He told the Broadcasting Press Guild that “more content investment is going in. It’s being done in a way that drives subscriber acquisition and retention. That in turn drives revenue forward, which in turn provides more funding to reinvest in more content.”
He suggested that the strength in content underpinned Sky’s ability to innovate in a range of ways, citing 3D and HD as examples, as well as offering flexibility in the consumption of content online and on mobile devices. “If you are the owner and creator of the content, you have much more flexibility about how you look to exploit it in new ways and those technical innovations are a lot easier to push forward at an earlier stage,” he explained. “That virtuous circle means that we’ve been able to push ahead with this investment in content and innovation at the same time as we’ve been growing profitability.”
Darcey suggested that talking about content seemed a little unfashionable, with headlines currently reserved for “sexy’ topics such as fibre networks, new platforms, or “the week’s latest online aggregator darling, be that Hulu or Netflix, or SeeSaw, or Google TV or LOVEFiLM, or a number of other similar operations.”
He typified these as “distribution players, none of whom were producing content.” He said this was a shame and a cause for concern. “In the end, somebody does have to make the content. I don’t think we want to end up in a situation where, as an industry, we build more and more distribution platforms and we wake up one day and find there is nothing really to watch.”
Darcey also questioned major broadcasters’ strategy of seemingly throwing all their content online for free, “because you need a digital strategy, don’t you?” People were now having second thoughts. “Not a lot of revenue is coming through from that. Questions are being asked about how much traditional revenue is being cannibalised.” He suggested that the UK’s terrestrial broadcasters rushed into their online players. This was fine for the BBC, which had no revenue to cannibalise, but he questioned whether it was “right and clever for the commercial broadcasters to follow quite so enthusiastically and quite so quickly. I sense they are now asking themselves whether it was the right thing.”
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