Netflix-type services not a threat to Sky, says CFO

Andrew Griffith

Subscription video-on-demand services such as Netflix are not having “a big impact” on Sky’s growth, according to Sky CFO Andrew Griffith.

Speaking to analysts after Sky released its Q1 figures, Griffith said that “the two services don’t go directly toe-to-toe” with each other. He said SVOD customers are generally either people who look to these services as a supplement to free-to-air and would not otherwise sign up for a pay TV service, or – “more commonly” – they take SVOD services “on top” of pay TV services such as Sky or Virgin Media.

He said the situation of SVOD customers is little different from the situation in the past where Sky customers would also rent DVDs to supplement their viewing.

Griffith said he saw little sign that OTT SVOD services in Europe were competing for first-window pay TV rights, as they did to some extent in the US. “They are trading a bit more on their original content,” he said, adding that the services lacked strength in movies in Europe and generally only carried movies on a non-exclusive basis.

Griffith said that while there had always been competition for rights from “different sources”, Sky still “typically has all the first pay TV rights” in its different markets.

Separately, Griffith highlighted a series of service launches and changes in Italy and Germany to drive subscription growth in those markets following first fiscal quarter results that revealed solid progress in both markets.

Griffith that Sky would launch a new Sky Kids app in Italy along with a fully HD video-on-demand offering, and would revamp its user guide with a new home page.

In Germany, Sky will take its Sky Sports News service free-to-air in addition to the planned launch of Sky 1 with flagship show Masterchef. Today also sees the launch of Sky’s UHD TV offering, with coverage of a football match between Dortmund and Hertha Berlin.

Griffith said that Italy had produced a strong quarter, emerging as Sky’s “fastest growing market”, with 4% like-for-like revenue growth. He said that over half of Sky Italia customers had now connected their set-top boxes to the internet.

Griffith also highlighted this week’s launch of enhanced mobile TV service Sky Go+ in Italy.