Sky looks to higher prices

Satellite broadcaster Sky hopes to achieve higher prices for TV packages in its core British market following years of investments to offer customers more customised bundles and premium content, its chief executive said.

By The Newsroom
Wednesday, 18th November 2015, 10:03 am
Sky television remote control. Photo credit: Dave Thompson/PA Wire
Sky television remote control. Photo credit: Dave Thompson/PA Wire

Sky CEO Jeremy Darroch said neither the rise of low-cost internet TV competitors such as Netflix nor the loss of some football broadcasting rights has dented its capacity to retain customers.

Earlier this year, rival BT Group took over the rights from Sky for showing Champions’ League European football matches, which some analysts said could make it harder for Sky to raise prices in the future.

But Sky said it retains dominance in other areas of sport, drama and entertainment. Already, the pay TV broadcaster has made modest price increases in sports and its Sky Atlantic channel.

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“I think the opportunity for pricing is good and it is certainly our intention in the UK to do that (raise prices),” Darroch told an audience of fund managers at Morgan Stanley’s annual industry conference.

“We want to do that behind innovation, behind improved service, behind improved content,” he added.

Sky, which now has more than 10 million subscribers in the UK and Ireland, has spent the last seven to eight years moving away from one-size-fits-all pricing, Mr Darroch said.

A decade ago, virtually every Sky pay television subscriber paid for a single bundle of services. Now, customers have an extensive choice which includes basic packages from £6 a month and premium options for £70 a month, Mr Darroch said.

“If we were only a service selling the big bundle today with a very narrow set of services, effectively forcing customers into a one-size-fits-all package, it would be harder,” he said.

Mr Darroch said Sky is enjoying all-time low levels of customer turnover not just in Britain but in Italy and Germany too.