Absolutely! Sky have 63% of the pay-tv market (including Now TV), per Ofcom's 2016 Communications Market Report, and 23% of the fixed broadband market. So, whilst broadband is an important source of revenue/profit, there can be no doubt that Sky's business is largely reliant on them attracting pay-tv revenues to directly support the pay-tv business.


Their priorities for 2016/17 reflect the above- concentrating significantly on driving tv revenues (whilst entering the mobile market):


https://corporate.sky.com/documents/...%20release.pdf (page 4)

I think that this reflects that there are greater opportunities for Sky to drive revenues/profits from other sources at this time, than prioritising the broadband market, where there is fierce competition from BT, and where BT has gained a substantial market lead in higher-paying fibre subscriptions.

That's ok by me but you cannot disprove the points I have made that broadband is not a secondary issue and that broadband, phone and line rental are key to overall subscribers and revenue stream. On the contrary I have provided you with the percentage figures taken directly from SKY's financial accounts which prove broadband is a very important part of their business.

SKY disclose operational costs but not an overall breakdown of each segment the overhead set against subscription, or infrastructure costs such as studios or associated presenters, production staff, editors, runners etc that go with TV and ofcourse programming costs. You can however make a reasonable assumption based on the wholesale price and what SKY charge customers for line rental which shows a gross profit of £740 million then add the average cost of broadband, cost of calls which will take this over a billion.

It may be your view that broadband is a secondary issue but my guess is that view wouldn't be shared by shareholders and investors who wouldn't take too kindly to seeing a billion in profits being drastically cut.

Thanks gs1.

As always you put it much better than me!

See post 126.

I'll let you reply to gs1.

You cannot discount that 37% of SKY subscribers take all three services broadband, phone and TV. Nor that over £1 billion in profit is made from telephony services.

Throughout my posts I have reflected that all parts of the business are interlinked and that if entertainment and sport is adversely affected it will impact on overall subscribers who may take other services such as broadband and phone services. An example is BT when their market share of broadband was affected by SKY offering attractive phone and broadband bundles tied to sport they responded by bidding for sport which has reversed the trend.

Of course SKY have issued statements regarding strategy and how they wish to concentrate building a better connected service but they cannot control the market so easily and as I have pointed out that sport is not their only concern and that they may have to address a threat to their entertainment side of TV. Do I think HBO will launch a stand alone streaming service in the UK now? NO. Will they however launch one when the current contract runs out in 3 years? Maybe! One thing is certain the renewed contract will be more than £275 million over 5 years. An immediate impact will be falling Sterling which for SKY has to be a major concern when they import so much of their content.

AT&T's acquisition of Time Warner which includes HBO is also a factor. They have merged because of the fragmentation of cable in the US and have to address this. It has been widely reported that Disney may buy Netflix as Reed Hastings would be their preferred CEO replacement and would make them the largest streaming service in the world. If it isn't Disney there will be no surprise if it isn't someone else. This could impact SKY especially as SKY are dependent on so much imported content.

Take away premium sport and entertainment and competitors offer a better bundle of all three services then it would have a huge impact on SKY. It s best to evaluate SKY as a whole operation not isolate one segment or even their strategy moving forward. The US cable sector have learned a costly lesson by ignoring the threat that Netflix posed. In just 5 years cable has lost 6.7 million subscribers with another 670,000 in the first three quarters of this year. Cable by and large was a cosy eco system for decades. No one forecasted the dramatic effect that Netflix would have and no one saw that almost everyone would launch stand alone services and even see cable packages fragmented to the degree they are now.

All of these factors will impact on how the UK landscape will change over the next 5 years and addressing their sports strategy is just one element that SKY have to address.

Indeed - Liverpool fans are already subscribing because they already show loads of Liverpool games. A few more won't make any difference. If you don't show any Watford games, Watford fans won't subscribe. OK, so there obviously aren't that many, but they want every subscriber they can get.


That would be worse for lower league teams. It's of no benefit at all for them to play at a time when the top flight isn't playing, because it becomes out of sight, out of mind. At the moment people tuning into Final Score and Soccer Saturday for Premier League news get the Football League as well - it's a good advert. If there isn't the Premier League, a huge number of viewers won't tune in at all.

I don't understand the suggestion matches could kick off at 4.15 - we already have matches kicking off at 12.30 and 5.30 on a Saturday, and 1.30 and 4.00 on a Sunday. And there's no benefit from having more than one Premier League match on TV at the same time, you don't get double the audience, you get the same audience split two ways. That's why UEFA now play the Champions League knockout rounds over four weeks, so there are fewer matches at the same time.

Also, I think it's only a very small audience who want to watch every minute of every match their team plays. Even if they do, they probably won't be there to watch all 38 matches - sometimes they'll actually be at the match. The vast majority of the Sky audience wants to watch Liverpool vs Man U and games like that.

Taking kick off times first. Currently we have almost every football and non league games kick off at 3pm and a televised match kicking off no earlier than 5:15. Moving the football and non league games forward an hour delivers the same time interval that exists now and Final score and related shows would just be in a slot an hour earlier so no change would be reflected on news about the lower leagues. My point about the games being played an hour earlier is that it doesn't impact on the rest of prime time viewing for family entertainment on the weekend or for football fans watching La Liga, Bundesliga or Ligue 1 games.

The idea I put forward in an earlier post is that 5 games could be played on Saturday and 5 games played on Sunday to accomodate the clubs playing in European competition especially the Europa League. Two of these games could be screened live on two channels open to all subscribers but the other games could be screened on live streams to fans of individual clubs something that many fans have asked for. Personally I would pay a season ticket to watch my team. Again a personal point but I think that games are spread over too many days and it may even get worse in the next contract.

The other point and is related to revenue and that the current payment is unfair on the football league. Parachute payments of £65 million give an unfair advantage to other championship teams. The revenue split is also unfair between the Premier League and the rest of the leagues. I'm not alone as a football fan thinking that football was hijacked by the top clubs seeking to drain as much revenue from the game for the elite few and basically tough luck on the rest. Whilst the Premier League is the main attraction it isn't only Premier League fans paying costly subscriptions, football fans from Accrington to Aldershot from Scunthorpe to Southend also pay to watch the Premier League through their subscriptions to SKY and BT.

The point I'm agreeing with mlt11 on, is that broadband/telephony services are of secondary importance to pay-tv for Sky. Whilst broadband/telephony services are important, the fact remains that more than half of Sky's customer base contributes profits that are derived solely from pay-tv.

I can see why your view differs, however, as your belief that Sky derive over £1 billion in profit from the 37%+ of customers who take telephony services, compares to an operating profit (for the UK & Ireland business) of £1.504 billion in 2015/16.

I can't see any evidence to support that Sky are deriving the majority of profits from telecoms.

I am referring to gross profit and overall revenue that is contributed through telephony services. One can assume that office infrastructure and subscription management would be shared fairly evenly for both TV and communications however programming rights acquisition and production of original content for both entertainment and sport together with infrastructure costs such as studios, outside broadcast facilities, production staff, presenters and contributors such as news contributors, sports pundits and transmission costs would pull back some of the overall gross profit created through TV.

My main point however is that these services are interlinked and that 37% of all subscribers to SKY take all three services, it may even be more or could be less as SKY stopped reporting this breakdown in 2014. If one part of the bundle breaks down such as losing major sporting rights to a direct competitor such as BT then they could lose revenue from at least two of those services, sport and communications. As Netflix continues to grow and Amazon now taking a serious approach to their Prime streaming service it will force SKY to face another challenge in that more subscribers will drift from satellite to their NOW TV platform, more people will opt in and out of contracts and that is why entertainment factors into the decisions SKY take on how much they spend on sport because they will have to offer premium entertainment content to keep pace.

Why should the tradition of football matches kicking off at 3pm on a Saturday be moved just see American audiences can watch a chappy premier league game the majority of fans will be outraged

I think if anything the number of live premier league games needs to be reduced not increased or Sky and BT will end up killing top flight football. Sky need to be careful with having exclusive sport rights for to long cricket has gone from been a popular summer sport where people got in to the ashes series to not many people caring at all which in turn can not be good for either sky or cricket the same will happen to F1 and nobody will care if they can't watch it. I

I got into Boxing years ago, when Naseem Hamed was at his peak, and then every big fight seemed to go PPV, i left it behind and haven't got back into it.

Going behind a (expensive) paywall can certainly kill huge support for a sport.

So we're supposed to stay in the 60's then and not evolve and move on to something better because Bob and John think moving things to better suit a modern audience is bollocks!
This whole obsession with 'its tradition' is most of the reason why so many fans stream their 3pm games because of the blackout yet are available on TV internationally but not where the game is being played and that is plain wrong!
And this isn't to suit an American audience, its to suit the British one!

Ok, thanks.


Yes, I agree- the 2016 Ofcom Communications Market Report suggests that 28% of households buy "Fixed Voice, broadband and tv" as a bundle- an increase from 25% in the previous year. So, there's an upward trend in bundling, and the point you've made- that "If one part of the bundle breaks down such as losing major sporting rights to a direct competitor such as BT then they could lose revenue from at least two of those services, sport and communications"- is one I've made many times on the forum.

The principle risk to Sky's business, in my opinion, is inability to secure key tv content, because it is the unique/market-leading part of the customer proposition that underpins the vast majority of customer relationships with Sky. That's the context on which I agreed with mlt11, that telecoms was of "secondary importance" to Sky. I'm not sure that we need to get "bogged down" , however, by differing interpretations of "secondary importance".

Potential loss of Premier League rights remains the key risk, in my opinion. However, Sky are increasingly mitigating it by broadening a demand in entertainment, from consumers who do not necessarily require sport as part of the bundle.

Per FT, on 17/11/16:

https://www.ft.com/content/d4fa6a30-...3-bb8207902122

Indeed gs1 - many thanks again - I agree with literally every word you say - you put it much better than me.

We haven't had traditional kick off times on a Saturday for over a decade. The other week there was 5 games on Saturday and 5 games on Sunday and only two of the games played on Sunday that had teams playing in the Europa League which sees Sunday set aside for those clubs. I'm not suggesting that early kick off times only suit American audiences but that it clears the schedule in the evening for those football fans who follow La Liga, Bundesliga etc as well as watching prime time TV. The other problem with kick off times early in the morning or tea time is that fans are subjected to difficult travel plans especially those travelling from the norh to south and vice versa. Fans buying a season ticket never know how to plan for games, my friend who has a season ticket missed 4 home games last season because he was working.

As I said it would be my preference as I would like the opportunity of buying a season ticket to watch a specific team probably the one my son follows. SKY and BT pay so much for football rights compared to the rest of the world indeed almost double what the rest of the world pays combined and that money comes out of our pockets and I don't think represent value for fans. NBC paid $1.2 billion for 6 years and show 380 games. "WE" pay yes "WE" pay through SKY and BT 12 times that and see less than half of the games they show.

I know that there are a growing number who already circumvent the system by watching illegal streams or accessing NBC etc but wouldn't you rather see all of the money go directly into the clubs here rather than VPN providers or those making money of selling boxes.

Most proper supporters will be trying to get to Match. Armchair fans who live miles away do not count. This would be another example of sky killing football. Look how many empty stadiums there is already. Proper football supporters are already annoyed at kick off times been changed as it is more live games will do more damage than good.

Still think there are only ten big teams in English football, and three of them are in the championship. If Newcastle, Leeds and maybe Villa were back in the Premier League there would be more big games for TV. Leeds v Newcastle last Sunday was a much bigger game than Middlesbrough v Chelsea in the eyes of a lot of neutrals. Leeds going to Anfield next week in the League Cup is a massive game because they will take loads of vocal travelling support. Newcastle could well be straight back up so it is good for the top division.

I don't think any of us disagree with each other we just have a different interpretation of how all services are interlinked.

I'm not sure what evidence you have for 3pm games impacting on Prime Time TV viewing, as these games finish by 5pm. If you're referring to travelling away supporters (or Manchester United fans j/k) then that's a very small number in the overall scheme of things, and they've already made the decision to forego that in favour of watching their team, so the impact would be minimal.

I'm also not convinced that freeing up time for people to watch overseas leagues is anything of a driver.




Doesn't that just de-value the rights to the broadcaster though? It would seem to me that restricting those matches to "season ticket holders" would mean that the whole package is devalued, because the broadcasters won't be able to sell the package as a whole to customers of all clubs as effectively, and particularly to those who support teams not in the Premier League.

"Proper supporters". What exactly are proper supporters and who gets to decide? There can be many and varied reasons why "proper" supporters might not be able to get to the match, whether it be some, many, or all, the games. I shouldn't need to list them here - and it would be a long list.

Then there is the away games. As a season card holder who can only get to home games (and not all) my team is oversubscribed for away games to the tune of about 20,000. This would be true of all the bigger teams with good travelling support.

Despite being a season card holder I subscribe to an overseas service that gives me all my team's games. For convenience I would like to be able to have access to a channel that would give me the same here - whatever the cost.

Non Premier League fans are football fans and many of them pay for SKY or BT because they love to watch football so season tickets for games that aren't shown wouldn't affect them provided the main games were still broadcast and two were shown on BT and two on SKY although I and many others already hate that they have to pay two separate subscriptions to watch just half of the games NBC pay 12 times less to show all of the games. Why should UK fans be disadvantaged when an American can sit and choose to watch Arsenal, Chelsea, United or City record one then watch it soon after or watch the highlights package? I don't have an English team but my son supports Arsenal and I would probably share a season ticket with him because I like watching them. Just now I'd be tempted to buy one for Liverpool.

I think we have reached satuartion levels with football, we have games broadcast almost everyday of the week and I think that is contributing to the fall in viewing figures. I coincides with the falling figures for NBC in the US which are also down 17% this season. NFL is also down and again the same problem may be too many games over too many days as the NFL games are all over the place.

I must be missing something here:

You say we are reaching saturation levels, yet you want ALL of your team's games available, which means MORE live football.

I've made a point about UK customers not necessarily being interested in overseas football, and you've turned it round to talk about overseas broadcasters of the EPL.

You say that that earlier (i.e. 2pm) Saturday kick off times would free people to watch prime time TV, but you precede that by saying that 3pm kick offs DON'T impact prime time TV.

People wanting their own team doesn't necessarily equate to them wanting more live games in total (not sure where you're getting that from tbh) - it just means they want more of their own team.

That is surely not that difficult to understand

Personally, I just want a particular 38 games - despite the fact that I get to the stadium for near enough half of them. If more games are on live it doesn't affect me either way.

I think some of you have missed a trick here. In that many are thinking saturation in terms of Sky Sports and yet talking in terms of EPL on TV.

If like me you refuse to give Sky a penny and rely on other broadcasters for their EPL fix then if anything more would be nice.

I was truly gutted that BT only got 42 games last time round, from what I understood they were in the running for up to 70 games (the Sunday 2pm pack) but Sky blew them out the other water in the second round (it was a similar story the previous tender). 2 games every weekend on BT (or anyone but Sky) would have been perfect.

I really hope with the proposed extra 22 games up for tender next time round SKY are true to their 'selectiveness policy' and decide to at least stick with the 126 they have. Leaving at least 64 games, roughly two per round for other broadcasters. However I bet they won't.