Sky sees further scope to raise prices in Britain

[speedyrite]

Sky sees further scope to raise prices in Britain | Reuters

Nov 12

Sky Plc hopes to achieve higher prices for TV packages in its core British market following years of investments to offer customers more customised bundles and premium content, its chief executive said on Thursday.

Sky CEO Jeremy Darroch said neither the rise of low-cost Internet TV competitors such as Netflix nor the loss of some football broadcasting rights has dented its capacity to retain customers.

Earlier this year, rival BT Group took over the rights from Sky for showing Champions' League European football matches, which some analysts said could make it harder for Sky to raise prices in the future.

But Sky said it retains dominance in other areas of sport, drama and entertainment. Already, the pay TV broadcaster has made modest price increases in sports and its Sky Atlantic channel.

"I think the opportunity for pricing is good and it is certainly our intention in the UK to do that (raise prices)," Darroch told an audience of fund managers at Morgan Stanley's annual industry conference.

"We want to do that behind innovation, behind improved service, behind improved content," he added.

Sky, which now has more than 10 million subscribers in the UK and Ireland, has spent the last seven to eight years moving away from one-size-fits-all pricing, Darroch said.

A decade ago, virtually every Sky pay television subscriber paid for a single bundle of services. Now, customers have an extensive choice which includes basic packages from 6 pounds a month and premium options for 70 pounds a month, Darroch said.

"If we were only a service selling the big bundle today with a very narrow set of services, effectively forcing customers into a one-size-fits-all package, it would be harder," he said.

Darroch said Sky is enjoying all-time low levels of customer turnover not just in Britain but in Italy and Germany too.

Speaking for myself (and in the interest of full disclosure I am a Sky shareholder), I don't recognise the Sky he describes in some of those points! Spent the last seven to eight years moving away from one-size-fits-all-pricing? Basic packages from 6 pounds a month? Wow! Just wow...

[dog-man]

I am just so happy that I dumped the television package in September.
I still get to see all that I and my family viewed on sky for free now.

The £76.25 or whatever it is I save every month will go toward a holiday next year and every year after that.

I really don't miss sky at all. I thought I would as I was with them right from the beginning.

[wizard200]

Hello dog-man & speedyrite
I am not sure which planet Jeremy Darroch is on but if he thinks that Sky customers will
continue to except more & more increases in the monthly payments He could be in for a
surprise because there is only so much one can afford to pay.
But maybe He thinks its a bottomless pit.............
I for One am now very close to the maximum I am willing to pay per month but maybe
other people will be happy to pay whatever sky like to charge them : Only time will tell.

Just a Thought................. Time for a Beer Me Thinks.

[marjohn56]

Sky have been successful so far as there's been little competition in many respects, with the advent of other services such as NetFlix, Amazon and others coming along Sky will be hit.

In the last eighteen months we've dropped Sport & Movies, didn't use them enough to justify the costs.

Must ring up and cancel the call package too...

Sky's customers have been very loyal, but I think Sky are now taking the p***, certainly Mr Darroch is, obviously vastly overpaid so he can afford it.

[seawright]

Already, the pay TV broadcaster has made modest price increases in sports and its Sky Atlantic channel.

Really??
The original bundle, which includes Sky Atlantic, remained at £21.50 per month following this years round of price changes and actually fell to £20 per month for new customers and existing customers who were willing to enter into a new twelve month contract.

[Scubbie]

Whilst the Original Bundle has remained low, all other Sky products (I'll exclude NowTV as I've not followed these prices) seem to be going up above the rate of inflation.

Unless the staff are receiving pay rises above inflation, then the money is going somewhere.

[tenar]

nope no pay rises

[Scubbie]

nope no pay rises

In this case I guess that it will all be going to pay for some rising transmission costs and the rest will be down to the sports fees.

Personally I'd love to say that some was going to a better Sky Movies service, but sadly both Netflix and Amazon appear to be pinching some of the better films from Sky.

[wizard200]

Hello All
I do not think you have to be Mastermind : to work out Sky's master plan
they overpaid by a vast amount to retain the football as they were worried that BT would
outbid them & grab many from there customer base but they were unable to pass the full
costs onto the sports pack : So they loaded the family pack which covers a lot of the
customer base & tried to recover the money from them plus they changed the talk plan
to recoup some more money & they will continue to chip away with 'add on' charges until
they reach Mr Darroch's goal of paying more for less or the same........

I think the only action you can take is when you reach your limit you have to be brave
and say Thats it No More !!! & move on : I am sure you will miss sky but life will go on &
other ways of watching TV & the programmes you like will be found at a lower Cost.

Just a Thought............... The Clocks Ticking...!!!

[seawright]

I don't know what proportion of Sky's call centre staff are UK based but assuming no further price rises in the near future, having to pay them the living wage will cause a further dent in Sky's profits.