From shampoo to set-top boxes: the rise of Jeremy Darroch

BSkyB's chief executive is using lessons learnt selling Pantene at P&G to clean up in the media sector

Jeremy Darroch might have spent close to a decade at BSkyB, but it is surprising to hear how much of his management thinking takes him back to the soap powder and toothpaste world of Procter and Gamble. Far from the high-tech paraphernalia of set-top boxes, mobile phone apps and broadband, Mr Darroch, a likeable 50-year-old Geordie who spent 12 years among the Clearasil and Vicks VapoRub, is still keener to put himself in the mind of the consumer, not the media luvvie or broadcasting engineer.

A project he remembers being impressed by was when P&G singled out a small hair oil maker called Pantene from a company it acquired and built it into the biggest hair care brand in the world.

"It is incredible how you can take something like that and turn it into a huge new profit stream," Mr Darroch said. "There are parallels between that and content actually. You have this whole pipeline of ideas and often it is quite unpredictable which ones will land and be successful."

Mr Darroch is on the hunt for hits at the moment. The chief executive is fulfilling a pledge to hike spend on home-grown programming by 50 per cent to £600m a year by next year, hopefully giving customers more reasons to join and fewer reasons to leave.

It means that Sky, which was built on the lure of films and football, is spreading out into arts programming, comedy and now drama. The move marks the latest rounding out of the business, which in the past five years has moved from dish to download thanks to an internet push.

"The business has become very good at rotating its focus to where it sees an opportunity and pushing into that. That won't change as the market starts to open up and we see more distribution platforms."

Now a third of its customers take the "triple play" of TV, phone and broadband, where recent acquisitions have made it the country's second-largest provider after BT. Meanwhile 40 per cent of Sky's base has also signed up for the high-definition service. But the recent wave of activity has gone further.

There is Now TV, an internet service popular with students that Sky launched to pick up customers who didn't want to commit to a contract and Sky Go, for customers who want to watch on tablets or smartphones when they are on the move.

On-demand film rental through the set-top box puts Mr Darroch directly in competition with Netflix and Amazon-owned Lovefilm. He thinks there is room for all. "When I first joined Sky having not worked in the media industry I was always slightly surprised at how obsessed with itself it was. It tends to define everything as a little bit of a zero-sum game and I think that is a mistake."

But there are signs that the entertainment industry is upping the ante. From next year, Sky will pay £760m for its Premier League rights, still a cornerstone of its output, up from £541m, after BT dived into the auction.

"It is a huge bet for them and I'm sure they'll be very focused on trying to make it successful," Mr Darroch said. He knows BT boss Ian Livingston well, having been recruited to work under the Scot at electricals chain Dixons. Both have risen a long way, but if things had gone differently, Mr Darroch could have climbed even further.

He was widely expected to take a key role at News Corporation when Rupert Murdoch's group bought out the 61 per cent of the company it didn't already own, combining Sky in Britain with the pay-TV businesses in Germany and Italy. The outcry over the phone-hacking scandal saw bid hopes disintegrate two years ago.

"The business didn't really miss a beat through that period," he said.

That might not be the last of it. Only last month, James Murdoch, Mr Darroch's predecessor who retreated to News Corp in New York after being drawn into the phone-hacking net, described minority investments such as Sky as "unfinished business".

The pair were an effective double act and Mr Darroch backed James Murdoch to keep the chairman's seat, which he eventually relinquished.

"These things happen. I was sad to see him step down but I think he reached his decision which was the right decision at the time and then you have to move on." So does Mr Darroch expect News to brave the political maelstrom and try to bid again?

"If they do then we will deal with that at the time," he says. "My job is to make sure the business is in as good as shape as it can be and if I do that I'm doing the best job for all of our shareholders."

When the deal collapsed, there were calls from some shareholders to plot a course independent of News Corp. One glance at the board suggests that is easier said than done. While it has the requisite independent directors, it also has long-term Murdoch lieutenants such as Chase Carey, the magnificently moustachioed News Corp deputy chairman who tabled the takeover bid three years ago.

There have been times when independent investors grumbled they weren't seeing enough cash returns because of Sky's loss-leading investment in dishes or broadband. That isn't the case now. Sky has turned into a cash machine, buying back £1.25bn of its own shares in the past two years and hiking the dividend by 20 per cent, with the expectation there is more to come.

All that early investing is paying dividends now. Acquiring Lord Sugar's Amstrad meant it could produce more-efficient set-top boxes, which are already in 2 million homes. They can be upgraded remotely with software drops, reducing the need for future van deliveries. On the cards next, thanks to that internet connection, is advertising targeted to the individual viewer. Everywhere you look on a site tour, there are signs of Sky taking greater control of its supply chain, including working on its own mobile phone apps and even insourcing some of its army of engineers. Extra studio space is planned so the company will use Pinewood or Elstree less often for filming.

The media campus that is taking shape in west London houses 7,000 staff, but that will rise to 12,000 over time. A grey tower with a wind turbine on the top that houses floors of high-tech control rooms for Sky Sports News and other channels already dwarfs the low-slung buildings from where the broadcaster started out.

Mr Darroch had similarly humble beginnings. His grandfather was a miner and his father a tax manager, which might explain his first job in accountancy.

A move to P&G took him as far as Germany before returning home so his GP wife Rachel could carry on practising. So long focused on the man on the street in his career has created a straight-talking frontman for an empire that has worked hard lately to warm up its image.

Compared with the crisis that engulfed the BBC last year, Sky's progress has been incredibly smooth. Mr Darroch's team are still trying to learn more lessons, however, including from Dave Brailsford, the Team Sky supremo who has been known to pop in to give motivational talks.

"There is a real symmetry between both organisations," Mr Darroch said. "We try to reapply learnings, and things that we are good at we can pass on to them."

It must be handy having a cycling boss on hand for a company that is always on the move. Where does it stop? He can't say. "I think as a business we are always seeking to do new things. Our journey is one of almost perpetual renewal."

Sky by numbers

£568 average annual customer bill, up

£24 on a year ago

10.74m number of UK and Ireland customers

£760m amount paid per year to show Premier League football from next season

3.1m Sky Go users

Voices
voicesGood for Lana Del Rey for helping kill that myth, writes Grace Dent
Sport
The Pipes and Drums of The Scottish Regiments perform during the Opening Ceremony for the Glasgow 2014 Commonwealth Games at Celtic Park on July 23, 2014 in Glasgow, Scotland.
Commonwealth GamesThe actor encouraged the one billion viewers of the event to donate to the children's charity
Sport
Karen Dunbar performs
Entertainers showcase local wit, talent and irrepressible spirit
Sport
Members of the Scotland deleagtion walk past during the opening ceremony of the 2014 Commonwealth Games at Celtic Park in Glasgow on July 23, 2014.
PROMOTED VIDEO
Arts and Entertainment
The Tour de France peloton rides over a bridge on the Grinton Moor, Yorkshire, earlier this month
film
Life and Style
fashion Designs are part of feminist art project by a British student
News
Very tasty: Vladimir Putin dining alone, perhaps sensibly
news
Life and Style
Listen here: Apple EarPods offer an alternative
techAre custom, 3D printed earbuds the solution?
Arts and Entertainment
Top guns: Cole advised the makers of Second World War film Fury, starring Brad Pitt
filmLt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a uniform
News
The University of California study monitored the reaction of 36 dogs
sciencePets' range of emotions revealed
News
Snoop Dogg pictured at The Hollywood Reporter Nominees' Night in February, 2013
people... says Snoop Dogg
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Arts and Entertainment
A scene from Shakespeare in Love at the Noel Coward Theatre
theatreReview: Shakespeare in Love has moments of sheer stage poetry mixed with effervescent fun
News
Joining forces: young British men feature in an Isis video in which they urge Islamists in the West to join them in Iraq and Syria
newsWill the young Britons fighting in Syria be allowed to return home and resume their lives?
Arts and Entertainment
The nomination of 'The Wake' by Paul Kingsnorth has caused a stir
books
News
i100
Life and Style
food + drinkZebra meat is exotic and lean - but does it taste good?
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

PMO Analyst - London - Banking - £350 - £400

£350 - £400 per day: Orgtel: PMO Analyst - Banking - London - £350 -£400 per d...

Cost Reporting-MI Packs-Edinburgh-Bank-£350/day

£300 - £350 per day + competitive: Orgtel: Cost Reporting Manager - MI Packs -...

Insight Analyst – Permanent – Up to £40k – North London

£35000 - £40000 Per Annum plus 23 days holiday and pension scheme: Clearwater ...

Test Lead - London - Investment Banking

£475 - £525 per day: Orgtel: Test Lead, London, Investment Banking, Technical ...

Day In a Page

Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

Meet the US Army's shooting star

Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform
Climate change threatens to make the antarctic fur seal extinct

Take a good look while you can

How climate change could wipe out this seal
Should emergency hospital weddings be made easier for the terminally ill?

Farewell, my lovely

Should emergency hospital weddings be made easier?
Man Booker Prize 2014 longlist: Crowdfunded novel nominated for first time

Crowdfunded novel nominated for Booker Prize

Paul Kingsnorth's 'The Wake' is in contention for the prestigious award
Vladimir Putin employs a full-time food taster to ensure his meals aren't poisoned

Vladimir Putin employs a full-time food taster

John Walsh salutes those brave souls who have, throughout history, put their knives on the line
Tour de France effect brings Hollywood blockbusters to Yorkshire

Tour de France effect brings Hollywood blockbusters to Yorkshire

A $25m thriller starring Sam Worthington to be made in God's Own Country
Will The Minerva Project - the first 'elite' American university to be launched in a century - change the face of higher learning?

Will The Minerva Project change the face of higher learning?

The university has no lecture halls, no debating societies, no sports teams and no fraternities. Instead, the 33 students who have made the cut at Minerva, will travel the world and change the face of higher learning
The 10 best pedicure products

Feet treat: 10 best pedicure products

Bags packed and all prepped for holidays, but feet in a state? Get them flip-flop-ready with our pick of the items for a DIY treatment
Commonwealth Games 2014: Great Scots! Planes and pipers welcome in Glasgow's Games

Commonwealth Games 2014

Great Scots! Planes and pipers welcome in Glasgow's Games
Jack Pitt-Brooke: Manchester City and Patrick Vieira make the right stand on racism

Jack Pitt-Brooke

Manchester City and Patrick Vieira make the right stand on racism
How Terry Newton tragedy made iron men seek help to tackle their psychological demons

How Newton tragedy made iron men seek help to tackle their psychological demons

Over a hundred rugby league players have contacted clinic to deal with mental challenges of game