Stephen van Rooyen’s Speech at the Deloitte Enders Media and Telecoms Conference 2021

OFFICIAL PRESS RELEASE


NEWS PROVIDED BY
SKY

"Hi everyone, it’s great to be here again at the Enders conference. I’d like to thank Claire and the whole Enders team for putting it on, virtually this year.

What an incredible year we’ve all had, it’s really hard to walk past just how much profound impact Covid has had on our industry and our business, we’re all going to have our journey to talk about, but I’m going to talk today specifically about Sky and how we have progressed over the last 12 months.

Before we do that of course, our industry has been through an incredible amount of disruption in the last 12 months - whether you’re in sports production, you make TV shows, run a live studio, are in the advertising business or whether you supply the hospitality sector, you’ve not be able to escape the profound impact Covid has had on our industry and our business.

Of course, it’s also had the effect of accelerating video consumption in our customer’s homes. Streaming in particular has stood out as customers sought even more entertainment to fill out lockdown hours.

Over the last 12 months we’ve seen more brands announce and launch plans to go direct to consumer and we’ve seen much, much higher usage than any of us ever expected. So all in all, these are really big changes in a very compressed period.

On the demand side, we’ve probably seen an acceleration in the patterns of behaviour that customers had, moving effortlessly now into using streaming more as part of their daily lives. Over that period of time there’s been a lot of talk about business models and about resilience of our businesses, with different companies being impacted in many different ways by Covid.

What I’m going to do today is talk a little bit about what Sky has done and how Sky has progressed during that period.

So to me, Covid has shown that Sky and in particular our business model, our organisation and constituted by our fantastic people, is one of the most resilient media companies you can find. The number of customer relationships that we maintained over the Covid period in the last 12 months is 99.8% and that’s with the backdrop of us being able to not sell or install across many of our territories for many months.

Most importantly, we actually exited 2020 growing and growing quite considerably in all of our markets. Now that advantage that we’ve got, that resilience, comes in my opinion from the diversification of our business.

So first of all, of course we’re multi industry. We operate in video and people know us very well for that. We’re in the broadband business, the second biggest provider in the UK and we’ve just launched broadband in Italy. We also have a fledgling mobile business which is a few years old and growing really rapidly.

Secondly of course, we’re multi-product. Not only do we offer what we think is the world’s best aggregation in Sky Q but we’re also in the streaming business and increasingly we operate even more in producing and distributing content. Of course, we’re also in the multi monetisation business so of course we have DTC subscriptions - in fact, we’re one of the first and biggest of the DTCs around. We also have a big advertising business and of course we have a transactional business, and on top of all that we have a B2B video business and an emerging B2B comms business.

Finally, we are also multi-territory, where we’re looking to roll out the successful model that we’ve built here in the UK across our European footprint.

But if we stop and really focus in on one part of that puzzle, which is video and our video plan, to me there are three parts to our video strategy . First and foremost we’re in the business of meaningful aggregation - a full service offering for our customers and that is represented by Sky Q. Next of course, we’re in the decade old streaming business - we launched NOW TV about 10 years ago and really it was meant to be a pay as you go service. Finally and increasingly important in the whole mix, we’re investing in content where it counts for our customers. So I want to spend a moment on each of these just to unpack them.

So first, Sky has always been an aggregator since we were founded back in the late 1980s and through the 90s. We’ve done an incredible job I think of being the first place to go for aggregation of content. As we’ve progressed, we’ve added more digital channels and innovated to give people digital personal recordings - the creation of Sky+. It was actually launched about 20 years ago this month! Then we added catch up - we became the biggest catch up TV business in the UK, before also adding video on demand, where at one point we were the biggest video on demand platform in Europe.

Now, it’s becoming increasingly difficult for our customers to watch TV. As an industry, we are making it increasingly tricky for our customers to find what they want to watch and to enjoy everything that TV has to offer. So for us, it’s more important now than ever before that we adhere to the principal that we’ve always had - making it easier for our customers to find the content that they want, regardless of how that content has arrived into customer’s homes. Of course, content and the definition of content has also broadened.

Spotify is now as important as a linear broadcast channel. YouTube and fitness apps like Peloton, our customers expect to find these on their TVs, so what we’re doing increasingly is bringing that seamless aggregation experience that we’ve always delivered to a customer’s homes. It’s our job to make the complex linear recordings, VOD and mixed app ecosystem simple for customers – and we’ve stepped really hard into that.

So what have we done over the last 12 months during Covid?

Firstly, we invested a lot. You’ll have noticed our advertising of Sky Q during the period increased dramatically - a number of ad campaigns we run through the year, which are really proud of. We rolled out at a rate faster than we have at any point in history since we launched Sky Q. We closed the year with Sky Q in 60% of our customer homes in the UK and we expect that to keep growing over the next 12 months.

We also launched a load of new content. We launched BT Sport on the platform, we launched Disney+, we brought Amazon Prime onto the platform, we launched Discovery+, we launched YouTube Kids, the FIIT app, BBC sounds and of course, many many more.

One of our favourite features, is thinking about how these continuing enhancements come to life on the UI. We use increasingly really rich data to deliver that seamless experience I talked about earlier.

Our objective really is to show customers the best content that we can find for them, regardless of where the content is. If it’s from Sky, that’s great, if it’s from a partner broadcaster that’s fine too and of course, if it’s on app that’s even better. This is all algorithmically driven and customer behaviour focused, so we can do the best job we can of giving the customers what they want.

My favourite new feature is actually something we’ve called ‘What should I watch?’, which is driven by voice control and seamlessly brings to the surface, in one page, all the things that we think you’ll love.

We know that this aggregation strategy is working for our customers, our customers are even happier today than they were a year ago and we know that because our MPS has doubled over the past year. We know it’s also delivering for Sky because our customers are spending even more time in the Sky ecosystem, with a 20% increase in the time that customer spends on Q over the past two years. A quarter of that is attributable to the effect of Covid, but happier customers of course are also more engaged with Sky and unsurprisingly they choose to stay longer with us and we know that because our churn rate is at a record low.

Our aggregation is also delivering for our partners. We’ve seen that when we integrate video apps into Sky Q, the overwhelming majority of customers then choose Sky Q as their front door to access the service, driving engagement for them and helping grow their customer base.

Secondly, our streaming business NOW TV gives us another leg of growth. Our decade old business, has helped us grow our customers, grow our ARPU and it’s done it all in a pay-as-you-go fashion. Of course we know that our customers who buy NOW TV want something a little bit different, they want the flexibility that buying into a pay-as-you-go app provides The business is underpinned by the world leading OTT platform used now in the USA by Comcast for Peacock and it still represents the best place to find all the great entertainment, film and sport, you’d expect from Sky and it’s broadly available, you can get it on just about any platform you like, today.

Now the third-part of our strategy is to broaden our content offering. Over the last 12 months we launched five new content brands Sky Documentaries, Sky Nature, Sky Comedy, Sky Crime and we rebranded Sky History. With our broad genre offering, we have something for everyone in the household, under the Sky banner, we’re incredibly proud the channels we’ve got.

This year alone, I think Sky News was a standout, winning RTS Channel of the Year and together with our other content from our other partners, we have even greater breadth and depth as a business than we’ve ever had before, which is a key part of our offering. The foundation of our content offering is a multi genre original content business which we’ve been building and is going from strength to strength.

We’ve transformed it over the last five years and 2020 was our best year yet with more people watching more of our shows than ever before. We followed the simple strategy creating bold original TV that we know our customers love. We’ve given them more choice, greater quality and better value than any time in our past. In 2021, we will have 125 brand-new originals on screen - you may well have already seen ZeroZeroZero or Devils. This is a 50% increase in the number of shows that we launched in 2020.

We’re also ramping up our investment in original documentaries, we’ll have 30 documentaries in 2021 and we just launch Bruno vs Tyson. We are taking a big step also into original film, we have 30 Sky Originals this year on Sky Cinema, up from only two last year and next year we are planning to do one original movie per week.

We’re also going to continue to be incredibly proud of our world leading sports business, ‘21 is going to be a great year for us on screen and we’ll continue to innovate and build on some of the great new features which we launched over the last couple of months. For example Recap, which allows our customers to catch up on all parts of the match that they missed and watch along, re-watching the cricket World Cup final with Ben Stokes was a real highlight to me during the pandemic.

Our customers continue to show they love Sky Sports with record viewing figures since sport returned to our screens last year. We’ll also continue to grow Sky Sports as a force for good and support – including our support for initiatives such as Kick it Out and Black Lives Matter.

So the key takeaways, I think is last year was a tough year for all of us as an industry but we’ve come out of it stronger than ever before. Sky has extraordinarily exciting plans for its future.

I’d like to thank Sky’s people for their extraordinary effort and what they delivered for us over Covid. I’m proud to say that our employee satisfaction scores over that period have been at all-time highs.

I personally look forward to working with our partners, both current and future, to unlock new and exciting opportunities for us, for them and for our businesses together which is important for us and for our customers.

Thank you all and see you soon."

Source SKY

March 11, 2021 3:55am ET by SKY  

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