Sky will continue to expand its original content spending and is betting on iPhone-like revenue opportunities thanks to new technologies, such as a recently launched broadband-powered TV set, which offers monthly payment plans, CEO Dana Strong told a conference in London on Thursday.
Discussing Sky’s focus on growing its original content, with past hits such as Chernobyl, she said the company plays an “enormous role” in the “cultural economy” of the U.K. with over 500 million pounds (more than $610 million) being spent on original content this year on more than 200 originals, more than three times its 2019 output, she said at the Media and Telecoms 2022 & Beyond conference, organized by Deloitte and Enders Analysis. Sky has in recent years consistently grown its originals budget, with corporate parent Comcast repeatedly underlining its commitment to continue accelerating spending.
The opening of the Sky Studios Elstree production complex opens in a couple of months will bring $3 billion in productions to the U.K. over five years, she touted. Importantly, “we have done a fine job with multiple different voices,” ensuring that “the range of storytelling … is now very comprehensive and inclusive.”
Providing its own content and other streamers’ and media companies’ offerings these days makes this an increasingly important question for Sky: “How can we connect consumers to content.”
Sky Glass, a broadband-powered TV set that doesn’t require a satellite dish to access the company’s full suite of services and new features, including a playlist that compiles content across various services, launched in the U.K. in October and is rolling out in other markets this year.
“Technology innovation has always been at the core” for Sky, Strong argued, noting that Sky Glass changes sound and colors based on, for example, whether people watch movies or sports.
The CEO also called Sky Glass “our future innovation hub.” And she said that the company will be rolling out Sky Stream, a streaming device, and will also offer cameras to allow for joint experiences for viewers. Content aggregation is one key strategy for Sky, allowing consumers to access Sky and other content. “The core of what we do for consumers is we aggregate great content, and we make it available for customers to choose what they want to watch,” she said, calling Sky Glass “a platform for us.”
Targeting an increasingly “streaming-based audience” this way also opens up Sky to new consumer segments at affordable prices and creates opportunities for revenue generation, Strong said. The cost for the Sky Glass device depends on its size, starting at 649 pounds ($881.88), or 13 pounds ($17.65) per month. Strong said that changes the business to “the iPhone model, effectively” thanks to monthly fees for device ownership. Strong said that was “a nice next step in how we make Sky available.”
Noting that it has been almost 18 months since she took over Sky, Strong said that the company was “rebounding extraordinarily well” from the impacts of the coronavirus pandemic. And “we are really on the move” with technology innovations, such as Sky Glass, and streaming joint venture SkyShowtime with Paramount Global, previously known as ViacomCBS. After the partners received “full regulatory approval” for it earlier this year, the venture will launch a new subscription video-on-demand service in more than 20 European territories, including Spain, Portugal, the Netherlands, Czech Republic, Hungary, Poland, Sweden, Denmark, Norway and Finland, this year. The territories encompass 90 million homes.
Comcast acquired European pay TV giant Sky in one of the biggest deals in the media industry of 2018. In January 2021, it named Strong CEO, succeeding Jeremy Darroch who decided to step down from the role. Strong, who reports to Comcast chairman and CEO Brian Roberts, previously served as president, consumer services for Comcast Cable and has more than 25 years of international experience in telecommunications and media. She previously also worked as president and COO of Virgin Media in the U.K., chief transformation officer at John Malone’s Liberty Global, as well as COO of Austar in Australia.
Last fall, Strong told an industry conference that Sky would be looking to expand across continental Europe in the coming years, boost its content creation business and increase diversity. “There is no doubt that we can all do better” on diversity, she said back then.