Sky has turned in strong numbers in its last full-year results before it is taken over by either Comcast or 21st Century Fox. As that corporate drama plays out, the U.K.-based pay-TV giant said it would put more money into content – in particular, original scripted programming.
The company reported a 5% hike in full-year revenues of £13.6 billion ($17.9 billion) and a 9% uptick in EBIDTA profit of £2.5 billion. Sky is now in 23 million households across its European footprint, which includes Germany and Italy.
Sky has been sinking more cash into original programming and particularly drama. CEO Jeremy Darroch said Thursday that there would be more original scripted shows on Sky in the year ahead, with a 25% increase in programming spend, which is currently about £400 million. Darroch also highlighted the performance of content and distribution arm Sky Vision, which reported sales of more than £200 million for the year.
Sky Q, the pay-TV company’s highest-tier product, is now in 3.6 million homes, and Sky will launch it as an OTT service – meaning customers can get Sky without a satellite – later this year. Darroch addressed the emergence of OTT and SVOD on an earnings call Thursday, a day after ITV said it was prepping a best-of-British SVOD service and a week after Ofcom reported that there are now more SVOD users than traditional pay-TV subscribers in the U.K.
“We should expect more streaming services to emerge. It’s never been easier to get to the consumer,” Darroch said. “It’s one thing to be a contender in this space; it’s another thing to be a winner. There are a whole range of additional skills you need to bring to bear to operate at scale, whether that’s consumer insight, data, churn management, loyalty programs, brand development. These are all important facets of developing a large, winning service in this space, and they are things we are good at.”
Sky has been the subject of a bidding war between Comcast and 21st Century Fox. Comcast currently has the upper hand, with an offer valuing the company at $34 billion, which has been accepted by Sky’s independent shareholders. Fox already owns 39% of the company.
Darroch’s own future is unclear as the bidding war plays out. He said questions about whether he and CFO Andrew Griffith would stay on after a Fox or Comcast deal were premature. “We haven’t had those conversations,” he said. “We will do that at the right time when one of the companies emerges” as the winning bidder.