Following reports that sales of Sky Glass are “underwhelming”, it’s now become more difficult to see how well Sky is doing in the UK and Ireland.
It’s a big time of change for traditional pay TV operators as they navigate a world of streaming and online platforms. For decades Sky was the main gatekeeper to exclusive content and the latest technology. As a public limited company, Sky would present its latest customer numbers every three months, letting the world know how the company was performing.
That changed when Comcast took over and Sky was delisted from the stock exchange. As Comcast took over, wider changes to the pay TV market started to gather pace. Sky’s long-standing relationship with Disney ended, numerous TV channels, from VH1 to Lifetime have exited the UK market and streaming services have gained millions of new subscribers.
Comcast combined Sky’s performance figures from across all of its European operations, meaning it was no longer possible to see how the UK/Ireland was doing in isolation. This method of reporting also had the effect on masking variations between countries, amidst reports growth in the UK was being offset by losses elsewhere. Comcast has been reportedly talking with other companies in Germany and Italy regarding a possible sell-off of its continental business.
Since last month, the data has become more opaque. Beginning with Comcast’s Q1 2023 results, the company has combined Sky’s figures with its other operations.
Sky’s figures are now divided across the “Connectivity and platforms”, “Content and entertainment” and “Corporate and other” headers in Comcast’s results, meaning it is no longer possible to see a Sky-specific breakdown.
For example, under “Connectivity and platforms”, Comcast combines data for its Xfinity service in the USA with related data from Sky in the UK and Comcast’s other connectivity and platform operations under a single set of figures. Total customer relationship figures shows the total across all of Comcast only. It means Sky’s own customer numbers are now published internally only.
Comcast may argue that these changes highlight the deep integration of Sky’s business within Comcast in the last few years. But it also contributes to speculation over Sky’s overall performance, although Sky UK will still need to publish annual accounts (but not customer numbers) as a limited company.
Last month, a critical report in The Sunday Times quoted a senior source at Sky implying the sales figures for next generation platform Sky Glass had been underwhelming. There has also been persistent rumours of job cuts to come, although Sky or Comcast hasn’t commented. Shortly after the first edition of this article was published, a call centre operator used by Sky has announced redundancies. Firstsource is now consulting with staff.
While sales of its new hardware are concerning senior staff, content is also high on the agenda.
At the beginning of the year, RXTV reported how the much-publicised launch of Peacock in the UK had fizzled out, with just a few titles left. After a tip-off from a reader, we checked reports from media sites in Europe, as well as Sky’s customer forums in Germany and Italy to find that a similar reduction of content was also taking place there. Sky quickly reached out to confirm Peacock was going nowhere; that new titles would still be added. Since then, Peacock continues to run with relatively little content on offer.
Meanwhile, Sky has given most of its TV customers free access to Discovery+. And Sky Cinema customers can access Paramount+ at no extra cost. But it’s the availability of content from within Comcast – including Peacock – that is of greater interest, with third party organisations like Disney no longer guaranteed to want to supply Sky with content and channels.
But even if sales are underwhelming and content is uncertain, Sky has been able to celebrate one positive. Ofcom confirmed last month that Sky had once again generated the fewest complaints from customers across broadband, landline and pay TV.
The WBD threat
Sky’s biggest challenge is however still to come, when its current content deal with Warner Bros Discovery (WBD) comes to an end. This will affect Sky Atlantic, which was built on a partnership between Sky and HBO, now part of WBD. WBD wants to launch streaming service Max in the UK and Ireland once its Sky deal is over, allowing it to offer shows such as Succession to non-Sky subscribers. Sky is working on boosting its own productions to plug the gap, investing in a major new studio facility at Elstree.
The combined clout of WBD threatens to eclipse Sky and Comcast in the coming years. Within the sporting arena, WBD’s control of BT/TNT Sports and Eurosport provides a significant threat to Sky Sports. Elsewhere, WBD controls a range of channels from Discovery to HGTV, Food Network to Cartoon Network, which constitute a large chunk of Sky’s pay TV service. WBD’s entertainment shows and movies are currently found on Sky’s own channels. Any dispute or non-renewal of carriage would leave Sky with a huge content hole.
How all of this may impact Sky in the future looks set to be hidden ever deeper inside Comcast’s financial reports.