Pay TV UK Industry Final (1)

Katy Sweetman Daniele Caruso Charles Julian Joseph Henry Cooper Kyujin Chung

Sport Management Group 3

Pay TV UK Industry

Pay TV UK Industry

UK TV Market worth £13.2bn in revenue 2014 3.1% year on year increase

Pay TV Subscriptions worth £5.9bn

PAY TV INDUSTRY IN THE UK

Bargaining Power of Suppliers (High)

Changing viewing habits

Threat of Substitutes (High)

Threat of Substitutes (High)

Competitively priced Bundled deals with Broadband, Fixed Line

and Mobile allows customers to get a better deal and manage there utility bills better

Bargaining Power of Consumers (High)

Would require infrastructure in place to compete i.e Virgin Fibre, Sky’s Satellites, BT Cable

Would require large amounts of capital Used to buy TV rights i.e Sports Rights, Imported TV shows

Threat of Entry (Low)

Economies of scale Access to transponder capacity Access to subscriber bases High switching costs Learning curve Premium programming Substantial costs Strategies by players already established Access to distribution networks

Barriers to Entry

1.4 Million Subscribers Triple Play - Phone, Broadband & TV Acquired EE on 29/1/16 Only broadcaster to show the UEFA Champions

League Football paid £897m for the rights IPTV through fibre optic technology Shows Sky Sports 1 and 2. Following a review

from Ofcom in 2010 forced sky to change how much they were charging for wholesale prices. BT offered it to its customers

BT

£11.3bn Revenue £1.196bn Operating Income 12m subscribers UK and Ireland Satellite TV Triple Play TV, Phone and Broadband Sky Go allows viewers to watch channels

through mobile devices. Premier League Football paid over £4bn for

the rights

Sky

PackagesSKY

Sports Bundle-£1000 (All SKY sports & BT Sport Channels included)

Pay-per-view "One-off" packages:(NOW TV)

- Day pass-£6.99- Week pass-£10.99- Month pass-£31.99

BT

Sports Bundle-£750 (All BT sports channels + SKY Sports 1 & 2)

Online Packages:- £5 per month WITH BT broadband- £19.99 WITHOUT BT

broadbandFREE with TV

package

Sky vs BT

Why is Sport Important for Pay TV?

VRIO - SkyResources Value Rarity

Difficult to Imitate

Organisation

History – internationalInternational Appeal

Rupert Murdoch - Chairman and CEONews Corp Umbrella

Customer BaseExperience of the broadcasting industry

Sky BetEmployees 30,000

Now TVSatellite

Values - Believe in BetterExclusive Rights

(For example:. NFL, Boxing, Tennis US Open and Golf)

Joint Rights(For example: Premier League, National League, FA

Cup, Cricket, Rugby, F1 and Darts)

VRIO – BTResources Value Rarity

Difficult to Imitate

Organisation

OpenreachBT Global Services

Experience of Telecommunications Industry

Historical - in Britain since 1846Sir Michael Rake - Chairman

Employees 88,000Fibre Optic

Ownership of EE

Exclusive Rights(For example: UEFA Champions League, Scottish

League Cup and other European Leagues)

Joint Rights(For Example: Premier League, FA Cup and

National League)

Competitive Advantage SKY

Large subscriber base (66% of pay TV market) First Mover Learning curve “Top pick” of Premier

League games

BT

Price Broadband monopoly 4K HD Champions league

Sky Strategy

BT Strategy

Future StrategiesSKY

Attracting customers through sports to its TV services or triple play

Future: Sky Q HD

BT

Attracts customers to its broadband services through free BT sports packages.

Interest in driving Broadband

Future: Ultra HD