Sky’s Darroch notes sports rights inflation
April 20, 2016
By Chris Forrester
According to Sky Europe’s CEO Jeremy Darroch, speaking on CNBC’s business news channel, although the cost of acquiring certain sports rights has risen, the broadcaster’s ability to monetise these over a range of platforms is a key driver in the company’s growth prospects.
Darroch said: “The real question is about how effective are we at monetising those investments and what we’ve built in the UK is a highly effective monetisation engine so we don’t just supply sports rights in one way. We provide it in a multitude of different ways including pay as you go as well as a subscription service. And increasingly of course we’re also able to leverage new revenue streams on the back of that.”
“It’s less about the absolute investment we make but actually about our ability to continue to grow, continue to get greater scale and then to be able to monetise over a much bigger population and build a base of customers. The interesting thing about the UK, and it’s a characteristic of all of the markets in Europe, is still only about 50, 55 per cent of people actually pay for TV. So if we can continue to persuade more people to upgrade then there’s still a huge amount of value that we can then reinvest in the very best content for our customers.”
Asked specifically whether some sport’s rights were simply too expensive, Darroch said: “Our investments in entertainment content and what that’s allowing us to do is appeal to more people in the household and perhaps people who don’t want to get Sky for sport and it gives us then more options around what we invest in. So just as we’ve invested more in domestic football for example we’ve walked away from some of the sports as well. So inevitably we have to make the right choices but it’s still anchored behind the fundamental growth opportunity that exists in the business today.”
Sky releases its latest financial numbers on April 21st.