James Moore: Super-competitive Sky worth keeping an eye on


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The Independent Online

Outlook The sun in chief executive Jeremy Darroch’s Sky is a bright one. Reporting his first set of results since BSkyB’s merger with Sky Italia and Sky Deutschland, he’s hitting a sweet spot with the latter in particular. German consumers are rapidly coming around to the idea of paying for premium TV services.

But the UK business is also flying high. Customer numbers grew at the fastest rate for nine years, and those on board are staying put and buying more products. With the company’s plans to indulge in a little four-play (TV, broadband, fixed line and mobile) through a deal with Telefonica, could the best be yet to come?

Sky’s rosy outlook bodes well for the forthcoming Premiership TV auction. The company might not be allowed exclusivity but it still has the best package and it would be a shock were it not to retain that, even with competition from the likes of BT.

Not that BT is the only competitor the outwardly genial Mr Darroch is having to deal with. They’re coming at him from multiple directions. Netflix and Amazon have opened a new front in pay TV, providing a huge back catalogue of content for their subscribers to watch when they want, while at the same time producing high-quality original material.

But Sky has oodles of premium content, whether imported (Game of Thrones and other hit shows from America’s HBO) or original (Fortitude being the latest hit).

This it deploys to secure an advantage over rivals such as Virgin and BT, neither of which, funnily enough, have been able to secure deals to screen the Sky Atlantic channel on which they appear.

Sky can reasonably point to all that competition to head off any questions about its behaviour over the latter, and when it comes to other issues.

Still, this is a company that Ofcom needs to keep a close eye on. A close eye indeed.