Prepare to be wrong about Sky

Cheers among the chattering classes.

Prepare to be wrong about Sky.

When BSkyB shares dipped recently there was more than a little cheer among certain parts of the UK's chattering classes. For many, especially those on the liberal, intelligent left Sky's Murdoch links, anti-intellectual approach and opposition to the BBC makes them feel that their subscription, bought on the basis that football is, after all, the stuff of life, smacks of hypocrisy. And hell hath no fury as a middle-class liberal made aware of their own hypocrisy.

Sky's dominance as a sport broadcaster, its presence in pubs and bars (even the rough ones) and its almost sacrilegious pokes at the BBC do not win it many friends.

But strip away the schadenfreude and the share price movement was entirely predictable. The initial drop in share price after the results were released was obviously just a reflection of profit taking rather than an indication of weaknesses in the business. The results themselves highlight the strengths of BSB, not least a solid strategy in the face of a confused and complex media scene.

Sky's great strength is that is has a good share of a market that is comfortable with a monthly subscription and eager for cross-platform services and content. It already has 35 per cent of its customers buying into the cross-platform offer.

Younger consumers don't understand annual licences and have no more interest in maintaining the BBC, or any other traditional broadcast operator or news provider come to that, than they have in buying newspapers.

The BSkyB investment strategy does not have to take into account legacy services of the sort that will, for many of its rivals, become an ever greater burden.

BT's foray into sport broadcasting is much lauded and gets positive media attention - mostly for all the wrong reasons. However, it does show that BT is serious about becoming a media player. It is determined to offer content as well as technology and infrastructure. That said, Ian Livingstone has departed and BSkyB is not going to wait around while rivals try to catch up.

Photograph: Getty Images

Spencer Neal is a reformed publisher who now advises on media and stakeholder relations at Keeble Brown. He writes about the ironies and hypocrisies that crop up in other peoples' businesses. He is also an optimist.

Photo: Getty
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The big problem for the NHS? Local government cuts

Even a U-Turn on planned cuts to the service itself will still leave the NHS under heavy pressure. 

38Degrees has uncovered a series of grisly plans for the NHS over the coming years. Among the highlights: severe cuts to frontline services at the Midland Metropolitan Hospital, including but limited to the closure of its Accident and Emergency department. Elsewhere, one of three hospitals in Leicester, Leicestershire and Rutland are to be shuttered, while there will be cuts to acute services in Suffolk and North East Essex.

These cuts come despite an additional £8bn annual cash injection into the NHS, characterised as the bare minimum needed by Simon Stevens, the head of NHS England.

The cuts are outlined in draft sustainability and transformation plans (STP) that will be approved in October before kicking off a period of wider consultation.

The problem for the NHS is twofold: although its funding remains ringfenced, healthcare inflation means that in reality, the health service requires above-inflation increases to stand still. But the second, bigger problem aren’t cuts to the NHS but to the rest of government spending, particularly local government cuts.

That has seen more pressure on hospital beds as outpatients who require further non-emergency care have nowhere to go, increasing lifestyle problems as cash-strapped councils either close or increase prices at subsidised local authority gyms, build on green space to make the best out of Britain’s booming property market, and cut other corners to manage the growing backlog of devolved cuts.

All of which means even a bigger supply of cash for the NHS than the £8bn promised at the last election – even the bonanza pledged by Vote Leave in the referendum, in fact – will still find itself disappearing down the cracks left by cuts elsewhere. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.