MIPTV: Jeremy Darroch Says In-House Content Now Key for Sky
“Original content could become a big part of our business,” says the CEO of Europe's leading pay-TV group.
Sky, Europe's number-one pay-TV group, has built its business on sports, news and U.S. series, particularly from HBO. But Sky CEO Jeremy Darroch sees drama, produced in-house, as the future.
“It could be a big portion of our business,” Darroch said, speaking at a keynote at international television market MIPTV in Cannes on Monday. “Our intention is that those shows can sit alongside the programming we acquire, and will continue to acquire, from our partners.”
Sky has dipped its toe into original drama, greenlighting Arctic crime series Fortitude, which it aired simultaneously across all its territories — in the U.K., Germany and Italy.
In Italy, Sky has backed a number of critically acclaimed series, including political drama 1992 and the mafia-themed Gomorrah, which also have been ratings hits. U.K. operation BSkyB took control over both Sky Deutschland and Sky Italia last year from Rupert Murdoch's 21st Century Fox and has merged the companies under the single Sky label. Fox still holds a 39 percent stake in Sky, making it the single largest shareholder.
In commissioning drama series, Darroch said ratings potential — particularly overnight ratings — were less important to Sky than originality. He noted that Fortitude brought new viewers to its drama channel, Sky Atlantic, that were not familiar with the networks. “When we commission, we look at a whole range of things...what customers are telling us, resonance in terms of new customers and of course look at the reaction from the creative community. Because we know that is important in how we build (our drama production business) over time.”
By its own estimate, Sky is already Europe's leading investor in television content, with a combined program budget of some $7 billion.
The strategy of bowing original Sky productions day and date across Europe, pioneered with Fortitude, is one Darroch said the company will use in future. He said he had just signed off on “seven or eight” new commissions that would have a pan-European bow.
But Darroch made it clear that spending more on original drama would not mean the company would scale back on sports rights or acquisitions. Indeed, Sky in the U.K. just singed a record deal for rights to the English premiere soccer league, which will see the pay-TV group shell out $6.4 billion over the next three seasons, an 83 percent price hike on the previous Premiere League deal.
Speaking more broadly on Sky's strategy, Darroch said he saw strong growth potential in all three of the company's territories. “While we have more than 20 million subscribers (in Europe), there are something like 60 million homes (in the three territories) that currently aren't paying for premium TV. If we can convert even a relatively small percentage of those homes to Sky, there is huge potential for growth.”
In the U.K., where Sky already has more than 10 million subscribers, Darroch suggested growth would come from expansion into new businesses. “The transactional business, for example, digital DVD rentals and sales, is one where we haven't been that active but I think we could make a major impact.”