At a Glance

Source: Sky 2018 Financial Report

 British Sky Broadcasting – The Journey

Source: Sky 2018 Financial Report

 Sky Group Today – Financial Data
  2018 (£m) ∆% 2017 (£m) ∆% 2016 (£m)
Revenues 13585 5.2% 12916 7.9% 11965
Operating expense 12551 5.0% 11952 8.8% 10988
EBIT* 864 7.6% 803 6.8% 752

Net income 815 17.9% 691 4.2% 663

Total Assets 18002 -2.4% 18438 5.9% 17410

Total Liabilities 13982 -4.2% 14591 4.5% 13969
Total Equity 4020 4.5% 3847 11.8% 3441

ROS 1.060 -8.8% 1.162 2.5% 1.134

ROA 0.045 20.8% 0.037 -1.6% 0.038
ROE 0.203 12.9% 0.180 -6.8% 0.193
Capital turnover 0.045 20.8% 0.037 -1.6% 0.038
EPS (in pence) 47.5 17.0% 40.6 4.1% 39.0

Source: Sky Financial Report for 2016/2017/2018

The Industry: Porter 5 …
• SUPPLIERS: division between
technical inputs and content
creators

• BARRIERS TO ENTRY: Capital

investment mostly

• EXISTING COMPETITORS: Fight

between national and international
players for the Italian market

• SUBSTITUTES: Strongly depends on

customer preferences, versatility
problem

• BUYERS: High price sensitivity and

low switching costs
 …+3
COMPLEMENTS DYNAMICS

COOPERATION
 Strategic Group Analysis
SKY
MEDIASET
PREMIUM

NETFLIX

AMAZON PRIME
VARIETY OFFERED

VIDEO

NOW TV INFINITY TV
DAZN

PRICE
Industry Life Cycle

•• Sky
Sky was
was one
one of
of the
the first
first pay
pay TV
TV
service
service providers
providers to
to appear
appear onon the
the
Italian
Italian arena
arena

•• Nowadays
Nowadays thethe market
market has
has
flourished,
flourished, thanks
thanks to
to new
new players
players
emerging
emerging

•• Growth
Growth phase
phase has
has been
been overcome
overcome

•• There
There isis still
still space
space for
for expansion
expansion in
in
terms
terms of
of thethe consumer
consumer base
base and
and
services
services to to be
be offered.
offered.
 Sky’s Competitive Advantage

• When considering the Pay-TV

industry, we can say Sky hold a big
ROI market share with respect to its
Cost
Leadership Differentiation competitors

• This position of dominance in the

market was achieved thanks to a
differentiation advantage over
competitors

• The differentiation strategy allowed

Sky to set premium prices for its
services without losing market share
Market Share to its lower-cost competitors
 Sky’s CA: Differentiation

Selecting
Selecting the
the most
mostpopular
popular films,
films, Differentiation
Differentiation Production
Production of
of own
ownoriginal
originalcontent
content
tv
tv series
series and
and sports
sports matches
matches

Obtaining
Obtaining exclusive
exclusive broadcasting
broadcasting Segmenting
rights Segmenting its
its offer
offer
rights
 CA Defendability

Complexity
Protection
Formal Protection
DEFENDABILITY
Regenerate CA
Adaptation
Reconfigure CA
 CA Defendability – Protection
Complexity
Complexity Protection
- No specific formula Formal Protection
DEFENDABILITY
Formal Protection Regenerate CA

- Broadcasting rights (exclusivity) Adaptation

Reconfigure CA
- Copyright (own production)

- Cooperation with rights licensors and bodies:

1. Automated online monitoring tools
2. Implementation of on-screen imprinting of content
3. Systems to block illegal streams of live Premier
League matches
4. Registering patents for Sky’s products
 CA Defendability – Adaptation
Complexity
Regenerate Protection
- Amplifying offer through broadcasting rights from Formal Protection
popular shows DEFENDABILITY
Regenerate CA
- NowTV
Adaptation
- Acquisition of Mediaset Premium Reconfigure CA

- New streaming and on demand services (SkyGo,

MySky, …)

Reconfigure

- Collaboration with providers of other services, such

as Sky Soundbox (with Spotify) and Sky + Fastweb
 SKY Diversified Businesses

Selected students from 8 to 16 can Sky presents itself as a new 5 selected women receive £ 25000
take part in the activities behind player in the telephony market, and they are paired up with a tutor
journalistic services presenting an offer that that guide them in expanding their
combines Pay TV, landline and business network
mobile network
 Future Recommendations
Sky’s Objectives
 Amplify and consolidate its customer base
• Attracting new subscribers
• Increasing loyalty of existing customers

How to achieve these in the long term?

 Expand into home-entertainment
• Look at other home-entertainment providers such as RAI
• Micro-target Italian customers’ interests (provide a channel dedicated to
every sport, etc.)
 Improve service
• Overcome the satellite dish technology
• Improve customer service
• Reduce advertisement
 Create a SKY Experience
• Partnerships with other service providers (for example food delivery apps)
• Invest in interactions among users integrating social media features
• Increase the number of fidelity programs
Thank you for your attention!
 References
1. https://www.repubblica.it/sport/calcio/serie-a/2018/06/13/news/diritti_tv_sky_mediaset_e_perform_alla_fa
se_di_rilancio_alle_16_30_l_assegnazione_dei_pacchetti-198914907/

2. https://www.skygroup.sky/corporate/

3. https://www.theguardian.com/media/2012/aug/02/bskyb-power-rivals-competition-commission

4. https://www.ilsole24ore.com/art/notizie/2018-08-16/da-dazn-now-tv-come-funziona-modello-netflix-arrivo-calcio-
italiano-182304.shtml?uuid=AEcgaobF&refresh_ce=1

5. https://www.skygroup.sky/corporate/bigger-picture/strategy-and-governance/strategy