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.