The news from Unterföhring, near Munich, home of Sky Deutschland, was much, much better than expected. CEO Brian Sullivan, fresh from his annual holiday, used the clever device of delivering better results than the market forecast, and the old corporate mantra of under-promising and over-delivering has worked well for him and his team.
While the market was expecting around 36,000 new subscribers, Sky Germany delivered 47,100. Same with the financials, where the market expect a very modest but physiologically important break-even figure, of perhaps €10 million, Sky Germany managed an operating profit of €23 million (a year ago it lost €23.4 million). Indeed, the current quarter-year might well turn out to continue this progression.
This is Sky Germany’s first EBITDA profit in five years, and saw Q2 revenues grow 18 per cent and should nail once and for all the old myth that German TV viewers would not buy into pay-TV. Whether the all-embracing Sky Deutschland package, or SES Astra’s more limited HD+ service, Germany’s viewers are just as keen on quality television as they are anywhere else on the planet.
And pay-TV (and HD+) is all about scale. From today’s 3.13 million subs, all Sullivan has to do is to maintain that momentum, tapping into scale, tapping into younger viewers, tapping into Germany’s love of exclusive sports coverage, and also tapping into Sky Go, which is already the nation’s biggest OTT supplier.
Sullivan admitted there’s plenty more still to do, but expressing the sentiment that the potential in Germany is stronger than ever is spot on. And there’s another key advantage: Sky Deutschland has no nasty regulators breathing down its neck. No allegations of market domination, no troubles from government (either local or Federal), and an increasingly enthusiastic cable sector keen to take Sky-D’s wholesale product.