MipTV: Sky’s Jeremy Darroch Receives Variety Award, Sketches Out Sky Growth Strategy

The recipient of Variety’s 2016 Achievement in International Television Award, Sky group chief exec outlines growth strategies – content and consumer services – with Variety

Sky Group Chief Exec Jeremy Darroch
Courtesy of James Gourley/Variety/REX/Shutterstock

CANNES – Sky group chief exec Jeremy Darroch received Variety’s 2016 Achievement in International Television Award on Monday evening at MipTV, presented by Variety senior international correspondent Leo Barraclough and Reed Midem director of entertainment Jerome Delhaye.

The award was given on the basis of Darroch’s and Sky’s achievement in the recent past. Over a half-hour Q&A, however, Darroch talked implicitly of at least three ways he was seeking to grow Sky in the future: technology, content and consumer offer.

“We’re a growth business, we always were, we always will be,” Darroch told Variety’s Barraclough in an onstage Q&A.

“The challenge for Sky now is all about maintaining growth and looking for new international growth opportunities,” says Guy Bisson at Ampere Analysis. “As with others in the industry, increasingly gaining access to global rights or rights with a wide geographic reach will be key,” he adds.

Sky already spends $7.1 billion a year on content. But if Darroch’s conversation with Variety in Cannes was anything to go on, Sky, which is already backing some big productions, such as Jude Law starrer “The Young Pope,” with HBO and Canal Plus, looks set to amp up further its content drive, including into more original productions.

Darroch had high praise indeed for Sky Atlantic, the high-end drama/documentary channel Sky launched in the U.K. as recently as 2011.

“We could see the opportunity for high-end dramas, there was a gap in the U.K. market. It started to become very, very successful,” said Darroch. To feed Sky Atlantic, Sky has renewed its co-production agreement with HBO, and has just signed a huge content-brand deal with Showtime.

“Today, Sky Atlantic is regularly quoted as one of the top two reasons to ever join or stay with Sky. Customers view it very highly. It’s been a great success,” Darroch enthused.

A Sky show-reel of acquisitions and original productions – “Penny Dreadful,” “Gomorrah,” “The Tunnel: Sabotage,” “The Last Panthers” – announced “more and more of our original productions.” Sky has over 100 dramas in development or production, Darroch said.

Another Sky challenge is to “address the increasingly demanding needs of Sky’s customer base as well as attracting newer customers whose viewing decisions are not driven by the traditional pay-TV battering rams of blockbuster movies, and sports will be key,” Bisson argues.

That proved a second theme of Darroch’s Q&A. For Darroch, “a lot of the old view of Sky was that it was basically a pure satellite TV company. That was really how we started. But over that time, we’ve really tried to broaden how we distribute and use that to really segment all of our markets and find new ways of getting our content to more and more people.”

Sky got into streaming in 2005. “About two years ago, however, we wanted to take a much fuller step into over the top distribution,” Darroch recalled. The result was its streaming service Now TV. “Now TV targets clients who really might never become Sky subscribers. You can now see a broad range of platforms, Darroch argued.

If one milestone move by Sky was 2011’s launch of Sky Atlantic, another came in 2014 when it merged its operations in the U.K., Germany and Italy. That gave Sky one factor crucial to success: scale.

For Darroch, “what the merger allowed us to do was to broaden our horizons for growth,” exporting innovations such as Sky Q and Sky Now to other Sky territories, or collaborating on high-end co-production, such as “The Young Pope,” originated by Sky Italia.

The merger gave Sky a firm foothold in five European markets in which there are still some 60 million households which do not take pay TV. In a more challenging environment for incumbent pay TV operators, Darroch will now be looking to another achievement in international TV: unlocking more of that latent market demand.