BT's Exclusive AMC U.K. Deal Is "Clear Threat" to Sky, Analyst Says

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"The deal suggests BT is pursuing a strategy of selectively widening its range of content from primarily sport into other areas," says Liberum's Ian Whittaker.

An exclusive deal between AMC Networks International and telecom giant BT that will see the AMC network launch in Britain in September is another challenge for the U.K. arm of pan-European pay TV giant Sky, according to analysts.

The multi-year agreement, announced on Tuesday, will mark AMC’s British debut and will launch with the exclusive U.K. TV premiere of The Walking Dead companion series Fear the Walking Dead.

"The deal suggests BT is pursuing a strategy of selectively widening its range of content from primarily sport into other areas, which is a clear threat to Sky," said Liberum Capital Markets analyst Ian Whittaker in a report on Wednesday.

Reiterating his "sell" rating on Sky, he added about the deal: "It would suggest that BT is ramping up a strategy of pursuing non-sports content to widen its appeal. We do not think BT will look to acquire the major movie studio contracts (Sky has these locked up for several years anyway) but instead will look to sign selective deals on the more general programming front."

Sanford C. Bernstein analyst Claudio Aspesi echoed the sentiment. "It signals that BT continues to upgrade the product to increase stickiness," he said about the exclusive AMC deal.

He said it also is a sign of the evolution of the U.K. pay TV industry where Sky and BT have become the two dominant players. "The industry is turning into a duopoly, with the available content being snatched by one of the two companies, something which can only please content owners," Aspesi tells THR.

He adds: "In the past, Sky would have gone out of its way to secure a contract like this, but now financial resources have to spent more carefully, after the [English Premier League rights] contract."

Twitter: @georgszalai

 

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