Amazon and Netflix pose a growing threat to paid TV in the U.S., but in Europe, it’s a different story, said Stephen van Rooyen, Sky’s CEO in the U.K. and Ireland.
Viewers aren’t as quick to replace paid TV with streaming services in Europe as they are in the U.S., the media executive told attendees at an annual ISBA gathering July 3. That’s despite Amazon and Netflix in the U.K. pushing their players into a combined 12.7 million households in 2017, up from 9.6 million the previous year, according to the Broadcasters’ Audience Research Board. In fact, the spread of both streaming services across U.K. households has opened up more ways for Sky to make money, van Rooyen said.
“There’s a lot of noise around Amazon and Netflix entering the U.K. TV market and eating the British broadcasters’ lunch,” he said. “That’s not how we see it at Sky. We simply see more partnerships and more great content.”
Later this year, Netflix will be bundled with Sky’s premium subscription package for an as-yet undisclosed price. As much as Sky has been able to stave off Netflix, the fact that the two are working together for the first time since the streaming service launched in the U.K. suggests that Sky is worried about Netflix’s growth.
“We’re investing the equivalent of $10 billion for five countries versus Netflix’s $13 billion for the planet,” van Rooyen said. “Our model is different when you think that we’re buying sports rights, producing news and creating original programming for different markets.”
For all the competitive risks posed by Netflix and Amazon, Sky has insulated itself to a degree by situating it between the over-the-top players — using original content to drive subscriptions — and commercial broadcasters.
Van Rooyen did concede that Sky’s addressable platform AdSmart hasn’t scaled as fast as he’d anticipated. Following a deal with Virgin Media last summer, the broadcaster can offer a potential addressable audience of up to 30 million people in Britain and Ireland, but agencies aren’t doing enough to sell that reach to advertisers, said van Rooyen.
“There are some archaic trading methods in our [ad] industry that prevent us from getting momentum behind making that broader [addressable TV] standard available to more advertisers than it is today,” he said.
Get more exclusive coverage and analysis around the future of video, TV and entertainment by subscribing to the weekly video briefing email.
WTF is the TV upfront?
For as archaic as the upfront would appear to be — having originated in the era of black-and-white TV — the annual TV advertising negotiation cycle has become, if anything, even more vital.
‘The opportunity has never been bigger’: How the creator economy has opened options for creators to profit from their intellectual property
A wider array of creators are finding opportunities to license their video back catalogs and launch their own product lines.
The Rundown: Disney crosses 205 million total streaming subscriptions as Disney+’s quarterly subscriber growth surpasses rival streamers
Of the major subscription-based streaming services — Netflix, HBO Max, Paramount+ and Peacock — Disney+ netted the biggest number of new subscribers in the first three months of 2022.
SponsoredHow marketers and retailers are unlocking the true value of retail media
Ben Kneen, senior director of product management, Xandr It’s a challenging time for retailers in the advertising industry. As they cope with supply chain woes and inflation-related pressures, they seek high-margin revenue streams amid evolving privacy regulations and massive shifts in identity solutions — including IDFA, the deprecation of third-party cookies and more. In light […]
Member ExclusiveFuture of TV Briefing: Demand-side platforms stand to play a more important role in the ad-supported streaming market
This week's Future of TV Briefing looks at Samsung's pitch for advertisers to run their upfront deals through its demand-side platform and the potential for other streaming ad sellers to follow suit.
The Rundown: TV networks, streamers concentrate on content categories on NewFronts Day 4
From sports to home, TV networks and streamers focused on new vertical media ad-supported channels and tools to measure and target those audiences.