TOP PERFORMERS OF 2003: MEDIUM OF THE YEAR - SKY
campaignlive.co.uk, Friday, 12 December 2003 12:00AM
Despite the controversy over its new chief executive, profits of £371 million and the acquisition of its seven million subscriber target helped put Sky at the top of the list.
In an advertising recession, the media owners showing the most vigorous signs of life are the ones that rely least on advertising. But even in a buoyant economy, Sky's achievements in 2003 would have seemed exceptional - both in terms of programming and subscription growth. Furthermore, Sky has brought a touch of soap opera to corporate life too, what with the departure of the chief executive, Campaign's recently anointed Media Achiever of the Year, Tony Ball, and the hullabaloo surrounding the appointment of a successor.
Rupert Murdoch's son James is the new chief executive, although the question of his fitness for the job will doubtless continue to provide an intriguing Machiavellian subplot across the coming year and beyond.
But the bottom line is that Sky supplied some impressive numbers. In 2003, it delivered its first profits - £371 million - since launching Sky Digital five years ago, thus vindicating a risky investment strategy by which billions were ploughed into giving away decoder boxes.
But penetration growth has been in line with (or just a couple of months ahead of) forecasts, with Sky comfortably hitting its seven million subscribers target in 2003. Churn rates are down, while ARPU (the amount of cash it extracts from each subscription, on average, each year) is up. That's how Sky can take total revenues of £3.2 billion - up 15 per cent year on year. It has become a truly gargantuan business, a blue-chip company with a market capitalisation of more than £12 billion.
Meanwhile, it hasn't been complacent on the technology front. Witness a £20 million campaign to drive penetration of its Sky+ personal video recorder system and its success in growing the interactive advertising sector - it is now running an average of 30 interactive ads per month.
However, despite all of that, there would have been a sense of unease about Sky if it had failed to develop a 21st-century approach to content worthy of its digital delivery technologies.
Of the content that its technology delivers, sport remains pre-eminent. And no-one should underestimate the importance of Sky's success in landing FA Premier League domestic football rights for another three years. Sky has also reinforced its position as the home of live televised football by grabbing a share (alongside ITV) of European Champions League rights.
This shared rights situation helps showcase Sky's strengths. Whereas ITV can show two live games a night, Sky's extra digital bandwidth and channel capacity allows it to offer viewers a choice of all the top games being played that night. Taken along with all the other split-screen, "player-cam" bells and whistles offered by Sky Sports, it underlines Sky's position as a viewer-centric, innovative broadcaster.
This, though, has hardly been its Achilles' heel in the past, and there would have been continuing disquiet had Sky shown neither willingness nor aptitude to grow beyond sport. In 2003, the signs were hugely encouraging - a factor that was important in Campaign's decision to make Sky its Medium of the Year.
On the downside, though, was the indifferent performance of the broadcaster's flagship entertainment channel, Sky One. This surprised many who thought that Sky One would have been a priority for Dawn Airey, who joined from five more than a year ago to oversee all of Sky's non-sport output. But, arguably, the issue has been addressed by giving the job of Sky One controller to James Baker, an old Sky hand.
On the other hand, 2003 saw some milestones for multi-channel audiences in general. Perhaps the most impressive came at Easter when the combined audience of non-terrestrial channels exceeded that of both the BBC and ITV for the first time in total TV households.
Films continue to be a big part of the Sky offering - and its coup in poaching Sophie Turner Laing, the BBC's controller of acquisitions, to run the movie channels was hailed as inspired. She has reinvigorated Sky's movie channels, not just in rebranding them but in marketing them more aggressively and offering more choice. In November, Sky Movies offered universal free access to one movie premiere (About a Boy) and offered another (Star Wars: Episode II - Attack of the Clones) as a multi-start offering - in other words, virtually on demand.
These initiatives coincided with the announcement that Sky Movies now had more than five million subscribers, making it the most popular television movie service outside the US.
But some of its most significant programming achievements, though grabbing fewer headlines, came closer to home. For instance, Sky guaranteed the future of Artsworld (it had been due to close on 31 July) by taking a 50 per cent stake; and its commitment to slightly less highbrow artistic endeavour was evidenced in its launch of three new music channels - Scuzz, The Amp and Flaunt. Sky News continues to perform solidly.
More will be expected on the programming side during 2004, especially as Sky's programming controllers should have more disposable income to play with. In particular, they must restore confidence and momentum at Sky One. They must also reassess its future as an entertainment channel as an increasing number of people gain access to the Freeview free-to-air digital platform. For instance, should Sky One take the plunge and join the Freeview channel line-up? Those, however, are questions for the future. During 2003, Sky proved a worthy winner of Campaign's Medium of the Year.
Recent winners: five (2002); Glamour (2001); Metro (2000); Freeserve (1999); Daily Mail (1998).
This article was first published on campaignlive.co.uk
- Senior Digital Designer Twist Recruitment £35000 - £42000 per annum + benefits, City of London
- Senior Digital Delivery Manager Harvey Nash £55000 per annum + package, Nottingham
- Assistant Buyer - Global Tech Brand Aquent Up to £49,000 Dependent on Skills and experience, London
- Senior Digital Operations Manager Harvey Nash £50000 per annum + package, Nottingham
- Marketing Executive Blue Skies Marketing Recruitment £25000 - £30000 per annum, Benefits: Benefits, London
- Evian baby Spider-Man 'rescues' fans with Twitter answers
- YouTube reveals user habits to appeal to 'older' marketers
- Pitch update: eBay's media contest, DFS and 2 Sisters Food Group
- McCann wins Qatar Financial Centre brief
- Three's pony and cats with thumbs top the cute Easter ad chart
- Metro launches content agency