Jeremy Darroch - Amazon S3
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Jeremy Darroch
This document contains certain forward looking statements with respect to the Group’s financial condition, results of operations and business, and our strategy,
plans and objectives for the Group. These statements include, without limitation, those that express forecasts, expectations and projections, such as forecasts,
expectations and projections in relation to new products and services, the potential for growth of free-to-air and pay television, fixed line telephony, broadband and
bandwidth requirements, advertising growth, DTH and OTT customer growth, On Demand, NOW TV, Sky Go, Sky Go Extra, Sky+ HD, Sky Q, Sky Store, Sky Online, mobile,
Multiscreen and other services penetration, revenue, administration costs and other costs, advertising growth, churn, profit, cash flow, products and our broadband
network footprint, content, wholesale, marketing, synergies and integration, and capital expenditure.
These statements (and all other forward-looking statements contained in this document) are not guarantees of future performance and are subject to risks,
uncertainties and other factors, some of which are beyond the Group's control, are difficult to predict and could cause actual results to differ materially from those
expressed or implied or forecast in the forward-looking statements. These factors include, but are not limited to, the fact that the Group operates in a highly
competitive environment and faces competition from a broad range of organisations, the effects of laws and government regulation upon the Group's activities, the
fact that the Group’s business is based on a subscription model and its future success relies on building long-term relationships with its customers, its reliance on a
complex technical infrastructure which is subject to risk of failure, change and development, failure of key suppliers, the Group’s exposure to financial market risks, the
fact that the Group must protect its customer and corporate data and prevent breaches of security, risks inherent in the implementation of large-scale capital
expenditure projects, the fact that the Group relies on intellectual property and proprietary rights which may not be adequately protected under current laws or
which may be subject to unauthorised use and the fact that people at Sky are critical to the Group’s ability to meet the needs of its customers and achieve its goals
as a business.
Information on the significant risks and uncertainties is provided in the “Principal risks and uncertainties” section of Sky’s Annual Report for the full year ended 30
June 2016. Copies of the Annual Report are available from the Sky plc web page at www.sky.com/corporate and in hard copy from the Company Secretary, Sky plc,
Grant Way, Isleworth, Middlesex TW7 5QD. All forward looking statements in this document are based on information known to the Group on the date hereof. The
Group undertakes no obligation publicly to update or revise any forward looking statements, whether as a result of new information, future events or otherwise.
2
• More convinced than ever on the size of the opportunity
• German consumers are like any other consumers
• Good progress and integration gone well
• Under-communicated on the work that needed to be done
• Strong new team now in place
• Clear roadmap ahead
3
Carsten Schmidt Chief Executive Officer – Sky Deutschland
Premiere braucht ein
neues Drehbuch.
Oktober 2008
Premiere verliert weiter Geld und Kunden
Mai 2009
5
6
• Largest TV market in Europe with 42 million homes
• Over 8 million non-pay TV homes already today express an interest in pay TV
• Most affluent market in Europe – GDP per capita is 18% higher than UK and 39%
higher than France
• TV loving audience with viewing levels – 4 hours per day – equal to UK and France
20%
Source: SES, Satellite Monitor, Year End 2015; https://de.statista.com/statistik/daten/studie/188776/umfrage/bruttoinlandsprodukt-bip-in-den-eu-laendern/.; internal Research
7
Sky DE subs development
5m
2m
2001/02
2010 2016/17
2016 2020/21
2021
For the year ended 30 June. All numbers are rounded to the nearest millionth subscriber.
8
9
German TV Market revenues
€12.7bn • Pay TV is the fastest growing
€11.5bn
CAGR
sector
€10.2bn CAGR +9% 2.8
+7%
2.0
1.5 • Strong positive momentum
+1%
9.9 • Structural shift from free
+2% 9.5 to pay evident
8.7
2011 2015 2019
Pay TV Free TV
Source: PWC, German Entertainment and Media Outlook 2015– 2019; Roland Berger; CAGR based on PWC estimation. Germany only.;
http://www.vprt.de/thema/marktentwicklung/marktdaten/ums%C3%A4tze/werbeums%C3%A4tze/werbeums%C3%A4tze-tv/content/tv-erl%C3%B6se-2011?c=2
10Sky D #1 on satellite Sky D #1 on Cable / Telcos Sky D #1 on OTT
• ~20.1m TV homes • ~19.6m TV homes • First in the market with Sky Go
in 2010
• 2.9m Sky homes • 1.7m Sky homes
• 2m Sky Go customers; >100%
• Sky is the only Pay-TV choice • Long-term strategic
growth in last year
partnerships with cable &
telcos • Sky Ticket successfully
launched
Sky is the clear first choice in the German pay TV & OTT market.
Amongst those with ‘intention to purchase (pay TV)’ Sky rates 8x more popular than Netflix and Amazon.
Source: SES, Satellite Monitor, Year End 2015; TNS Infratest: Market Tracker FY16, Funnel incl. Austria, internal data.
11Viewership Shares Free TV market
CAGR +2% CAGR +1% €9.9bn
€9.5bn
€8.7bn
26%
23% €5.1bn
€5.0bn
21%
€4.7bn
16%
15%
€4.0bn €4.5bn €4.8bn
2011 2015 2019
ARD RTL Pro7 ZDF Other Public Advertising
Source: AGF in cooperation with GfK; TV Scope (+3yrs), Full Year 2015: Source: PWC, German Entertainment and Media Outlook 2015– 2019; Roland Berger; CAGR
Note: Sky data includes all channels offered by Sky, not only Sky channels based on PWC estimation;
12 https://de.statista.com/statistik/daten/studie/3966/umfrage/einnahmen-im-deutschen-
fernsehmarkt-seit-2003/13
Sky DE in the past Sky DE today
• Uncertainty, short term • Part of a long term, committed group
decision making
• Relentless focus
• Capital constrained
• Track record, strong product pipeline
• Stop start innovation
• Customer focused
• Sales focused
• Content for all of the household
• Bundesliga dominated
• Stable churn at 10%
• 20% churn and satisfaction15
1. 2. 3. 4. 5.
Strengthen Broadening Developing Innovating Building
and grow our range of content for to give new and
Sky Sports products the whole customers additional
and making household and revenue
Sky easy to prospects streams
transact more value
with
16• 572 live matches a season across all platforms
• 93% of all live matches on Sky exclusively
• Weekend and Monday night exclusively
owned by Sky
• Sky Sport still the home of fans’
favourite “Bundesliga Conference”
Bundesliga
Source: Internal Research, Sports Headroom Research, Dec 2015
17• High level of awareness (at 89%) among Germans
– Highly popular among fans
– 171,000 attendance each match day; 5.8m fans
across the season, +8%
– It will overtake French Ligue 1 next year
to become fifth largest league in Europe
• High quality teams and players
– 9 teams are former German champions, with 38
Championship and 23 Cup wins between them
– Current world champion playing in Bundesliga 2!
Bundesliga 2
18• Taking Sky Sport News HD free-to-air
– Launch on 1 December, increasing reach to
34 million homes in Germany and Austria
– Huge cross-promotion opportunity
• Creating a broader offer
– ATP tennis, US PGA Tour, The Open,
Austrian Ice Hockey
• Building new production facilities
– Cost synergies from in-sourcing
– Greater capacity to innovate for our customers
Wimbledon
19• > 1 million customers within 12 months
(twice as fast as it’s taken Netflix)
• Attracting incremental female audience:
– +10pp vs. average sales
– +17pp higher than existing base
• Contributing c€2 higher ARPU
in new sales
Source: IHS; internal data (MBI Market Tracker)
20Trailer:
Elyas M’Barek - 60 seconds
21Applying proven Attracting new Accessible price Broad range of devices
segmentation pay-lite customers point, immediate available
strategy access, no contract
22Trailer:
Sky Ticket - 40 seconds
2324
German film cinema visitors
37m
34m 32m
24m
2012 2013 2014 2015
Source: German Federal Film Board, ffa
25Trailer:
Babylon Berlin - 30 seconds
26• 367 full seasons available with >5,600
episodes
• Series and Box Sets increase consumer
willingness to pay by +29%
• 12% increase in customer satisfaction ratings
for Box Sets
• Available on Sky On Demand, Sky Go and
Sky Ticket
Source: TNS Infratest: Market Tracker FY16, Funnel incl. Austria
27• A new reason to join Sky and a brand new channel for customers
• New local productions and winning formats
• When and wherever you want with 360° availability
• MasterChef: the world’s most successful cookery show
- Cooking shows are the second favorite genre amongst entertainment TV fans
- Outstanding local judges including youngest German Michelin star chef and a
master sommelier
Justin Leone Ralf Zacherl Sybille Schönberger
28Trailer:
Sky 1- 30 seconds
29• On Demand and Sky Go increase consumer
willingness to pay by +27%
• Customer satisfaction ratings have increased
10% for On Demand in last 12 months
• We’re connecting 15,000 customers every week
• >92 million unique views since launch
Source: TNS Infratest: Market Tracker FY16, Funnel incl. Austria; internal viewing reporting MBI
30• Only 57% of our base are able to fully utilize PVR functionality
we now offer Sky+ for free as standard
• 1 million customers still only have SD channels
we now offer over 100 HD channels
• We upgraded the UI last November to give clearer, easier access
to our best content and features
But that’s just the basics, two weeks ago we
raised the bar much, much higher….
31Sky On Demand WiFi 1TB HDD Ultra HD ready
Thousands of titles Built-in WiFi for easy Store up to 120 hours of For the most stunning
available on demand connection to the recordings in HD quality TV experience, live and
Internet on demand
32Sky+ in 2015 Sky Q in 2017
33Launching Sky Store Growing the advertising business
• Coming in summer 2017 • More channels extend the opportunity:
open up new inventory and segments
• Entering €1.8bn transactional market
• Sky Sport News HD: going free-to-air in December
• Mix of local and global movies
• Innovation opening new opportunities, e.g.
• Buy & Keep launching at same time
Sky Adsmart
Source: GfK, Der Home Video Markt 2015, pages 26 and 113
3435
2016 Summer
2016
36Consistent double digit ARPU trend - now positive Strong underlying
revenue growth (€, monthly) EBIT growth
37
€2.0bn 36
€1.8bn
€1.7bn 35
c€40m*
€1.4bn
€1.2bn 34
€1.0bn 33
32
31
30
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
(€323m)
2011 2012 2013 2014 2015 2016 2014 2015 2016 2011 2016 2021
* Twelve months ended 30 June and includes benefit of 53rd week in 2016.
2016 adjusts for the connected home investment of €34 million on hardware
37 and ATL spend.Bilanz 2014/2015:
Sky Deutschland erstmals mit über
vier Millionen Abonnenten
Juli 2015
38FTA
2017 Christmas 2017
Portal
39• We have a huge opportunity in front of us
• We bring capability, resources and know-how
• To a market where conditions for growth are
better than ever before
• We have a plan with UK-proven models, but tailored
for the local market
• We will execute that plan at a pace no one can match
• And we’ll pursue it relentlessly Game of Thrones: Series 6
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