Strong demand for pay TV in Britain and a record jump in German customers helped Sky Plc post better-than-expected first-half profit in its first results as a European group. Hayley Platt looks at the bigger picture.
Real Madrid's Champions League victory last May was broadcast live to millions of soccer fans across Europe. And Sky showed it to more people than anyone else. A new bidding war for the tv rights to the UK's Premier League begins on Friday. It's inconceivable that Sky will lose, says Ovum's media analyst Ed Barton. SOUNDBITE: Ed Barton, Head of TV and Visual Entertainment, Ovum, saying (English): "There aren't many products which you'd think a company of that size depends but the closest thing to it is almost certainty the primary rights bundle for premiership football. We have to remember Sky is a premium prized product, they cannot get away with charging the kinds of prices they do without offering the absolute best in the market." Sky is now Europe's biggest pay-TV operator and demand for its services remains strong. It saw its highest growth ever in Germany, with a three year high in Italy and a nine year one in Britain and Ireland. The group's first results since teaming up with sister companies in Germany and Italy saw a 16 percent rise in first-half profits, well ahead of forecasts. SOUNDBITE: Ed Barton, Head of TV and Visual Entertainment, Ovum, saying (English): "We suspect that most of the growth that we've seen in this set of results is from online television streaming, which is good incremental new business, new customers new revenues but it's perhaps not as lucrative as the classic pay television subscriber who spends more money is committed for 12 months." But Sky's also beefing up its portfolio. It's just outbid the BBC for the rights to broadcast the British Golf Open live. And it's competing with the likes of Netflix and Amazon Prime for movies through Now TV. It is a little pricer than its competitors - but it offers the newest films ahead of its rivals. It's early days yet for Now TV but Sky sports deals are clearly already paying off .