‘Netflix and Amazon are complementary’: Sky CEO downplays OTT threat to paid TV

Amazon and Netflix pose a growing threat to paid TV in the U.S., but in Europe, it’s a different story, said Stephen van Rooyen, Sky’s CEO in the U.K. and Ireland.

Viewers aren’t as quick to replace paid TV with streaming services in Europe as they are in the U.S., the media executive told attendees at an annual ISBA gathering July 3. That’s despite Amazon and Netflix in the U.K. pushing their players into a combined 12.7 million households in 2017, up from 9.6 million the previous year, according to the Broadcasters’ Audience Research Board. In fact, the spread of both streaming services across U.K. households has opened up more ways for Sky to make money, van Rooyen said.

“There’s a lot of noise around Amazon and Netflix entering the U.K. TV market and eating the British broadcasters’ lunch,” he said. “That’s not how we see it at Sky. We simply see more partnerships and more great content.”

Later this year, Netflix will be bundled with Sky’s premium subscription package for an as-yet undisclosed price. As much as Sky has been able to stave off Netflix, the fact that the two are working together for the first time since the streaming service launched in the U.K. suggests that Sky is worried about Netflix’s growth.

“We’re investing the equivalent of $10 billion for five countries versus Netflix’s $13 billion for the planet,” van Rooyen said. “Our model is different when you think that we’re buying sports rights, producing news and creating original programming for different markets.”

For all the competitive risks posed by Netflix and Amazon, Sky has insulated itself to a degree by situating it between the over-the-top players — using original content to drive subscriptions — and commercial broadcasters.

Van Rooyen did concede that Sky’s addressable platform AdSmart hasn’t scaled as fast as he’d anticipated. Following a deal with Virgin Media last summer, the broadcaster can offer a potential addressable audience of up to 30 million people in Britain and Ireland, but agencies aren’t doing enough to sell that reach to advertisers, said van Rooyen.

“There are some archaic trading methods in our [ad] industry that prevent us from getting momentum behind making that broader [addressable TV] standard available to more advertisers than it is today,” he said.

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