Originally Posted by David_Flett1:
“It's a delicate situation for both BT and SKY if both lost the EPL rights to a foreign buyer then there wouldn't be much change in the overall broadband market share.”
“It's a delicate situation for both BT and SKY if both lost the EPL rights to a foreign buyer then there wouldn't be much change in the overall broadband market share.”
That may sound OK for Sky as far as broadband is concerned but it would be disastrous for Sky's overall business.
Sky doesn't report profit by segment but from what they have disclosed the proportion of their operating profit which comes from broadband / phone is approx 15%. In contrast approx 85% comes from TV.
That's not to say that broadband / phone isn't important - it generates some profit and its bundling helps the TV business by tieing people in, creating inertia and thus reducing churn. And of course there are economies of scale etc.
But even so, broadband / phone is very much a secondary consideration for Sky.
With BT it's the other way around in the sense that phone / broadband was the original core business and they then (originally) added TV to reduce phone / broadband churn.
So - in the above sense - Sky's and BT's businesses are mirror images in terms of their consumer markets (BT also, separately, also operates in other markets).
However, I think, proportionately, TV is now more important to BT than phone / broadband is to Sky - because the Champions League has taken BT's TV business to another level with BT's TV platform growing subscribers by 60% over the last 2 years - a phenomenal rate of growth.
The other key point is that TV offers far greater potential for revenue generation. It's possible to charge people £50 / £60 / £70 for TV whereas it's never going to be possible to charge at that kind of level for phone / broadband. Thus the potential with phone / broadband is capped much lower than it is with TV.



