Sky Network Television Ltd · NZX:SKT

Sky Network Television — Investor Day (May 2015)

67 slides from Sky Network Television's investor day presentation, May 26, 2015

  1. Slide 1: Investor Day 2015

    For personal use only INVESTOR DAY 2015 26 May 2015 |

  2. Slide 2: Disclaimer

    For personal use only DISCLAIMER THIS PRESENTATION CONTAINS STATEMENTS THAT REVIEW CURRENT BUSINESS OPERATIONS. MEDIA RELEASES AND MANAGEMENT COMMENTARY, INCLUDING THOSE RELATING TO THE 2015 HALF YEAR RESULTS ANNOUNCEMENT, ARE ALL AVAILABLE ON SKY’S WEBSITE. PLEASE READ THIS PRESENTATION IN THE WIDE

  3. Slide 3: CEO's Introduction

    CEO’S For personal use only INTRODUCTION JOHN FELLET CHIEF EXECUTIVE OFFICER FANATICAL ABOUT BASEBALL

  4. Slide 4: Agenda

    AGENDA For personal use only 1. CEO’S INTRODUCTION 2. CUSTOMER PERSPECTIVE 3. STRATEGY AND PRODUCT ROADMAP 4. ENTERTAINMENT CONTENT 5. SPORT CONTENT 6. ADVERTISING SALES 7. GOVERNMENT RELATIONS 8. GEARING AND DIVIDENDS 9. Q & A 26 May 2015 | SKY Investor Day 2015 4

  5. Slide 5: The Impact of the Internet

    THE IMPACT OF THE INTERNET For personal use only 26 May 2015 | SKY Investor Day 2015 Page 5

  6. Slide 6: Content Monetisation Engine

    CONTENT MONETISATION ENGINE For personal use only 26 May 2015 | SKY Investor Day 2015 Page 6

  7. Slide 7: We Are Quickly Realising It's Two Markets for Paid Content

    WE ARE QUICKLY REALISING IT’S TWO MARKETS FOR PAID CONTENT For personal use only • • Standalone Premium Pay TV OTT services • 26 May 2015 | SKY Investor Day 2015 Page 7

  8. Slide 8: NOW TV

    NOW TV For personal use only • • • • • • 26 May 2015 | SKY Investor Day 2015 Page 8

  9. Slide 9: Content Costs

    CONTENT COSTS For personal use only • • • • • • • 26 May 2015 | SKY Investor Day 2015 Page 9

  10. Slide 10: Pricing

    PRICING OUR RECENT PRICE INCREASE For personal use only • • • • WATCHING BRIEF ON ALTERNATE PRICING MODELS • • 26 May 2015 | SKY Investor Day 2015 Page 10

  11. Slide 11: Key Developments and Intentions

    KEY DEVELOPMENTS AND INTENTIONS For personal use only • Extend partnership with Vodafone to offer broadband through SKY • Exploring the option to provide NEON to customers with both SKY Movie & SoHo subscriptions, at no additional cost • Plan to enhance FAN PASS to include SKY SPORT linear channels

  12. Slide 12: Customer Perspective

    CUSTOMER For personal use only PERSPECTIVE MICHAEL WATSON DIRECTOR OF MARKETING FANATICAL ABOUT MAD MEN!

  13. Slide 13: What the Viewer Wants

    WHAT THE VIEWER WANTS For personal use only UNDERSTANDING WHAT VIEWERS WANT & WHY, IS UNDERSTANDING VALUE UNDERSTANDING VALUE UNLOCKS THE POTENTIAL TO PROFIT FROM CHANGE 26 May 2015 | SKY Investor Day 2015 Page 13

  14. Slide 14: Human Needs

    HUMAN NEEDS For personal use only 26 May 2015 | SKY Investor Day 2015 Page 14

  15. Slide 15: Desires & Expectations

    For personal use only DESIRES & EXPECTATIONS 26 May 2015 | SKY Investor Day 2015 Page 15

  16. Slide 16: Influences

    For personal use only INFLUENCES 26 May 2015 | SKY Investor Day 2015 Page 16

  17. Slide 17: Outcomes

    OUTCOMES For personal use only 26 May 2015 | SKY Investor Day 2015 Page 17

  18. Slide 18: So What?

    SO WHAT? For personal use only 26 May 2015 | SKY Investor Day 2015 Page 18

  19. Slide 19: Strategy and Products

    STRATEGY AND For personal use only PRODUCTS MATTHEW ORANGE DIRECTOR OF STRATEGY AND PRODUCTS FANATICAL ABOUT TRAIL RUNNING

  20. Slide 20: Investing Across Multiple Horizons

    INVESTING ACROSS MULTIPLE HORIZONS For personal use only 26 May 2015 | SKY Investor Day 2015 Page 20

  21. Slide 21: Core – Product Pipeline

    CORE – PRODUCT PIPELINE For personal use only • • • • o o o o o o 26 May 2015 | SKY Investor Day 2015 Page 21

  22. Slide 22: Adjacent – Product Pipeline

    ADJACENT – PRODUCT PIPELINE For personal use only • • • • • • 26 May 2015 | SKY Investor Day 2015 Page 22

  23. Slide 23: Entertainment

    ENTERTAINMENT For personal use only TRAVIS DUNBAR DIRECTOR OF ENTERTAINMENT (NON-SPORTS CONTENT) FANATICAL ABOUT CONNOR MCGREGOR

  24. Slide 24: SKY Has a Broad Entertainment Mix

    SKY HAS A BROAD ENTERTAINMENT MIX For personal use only OWNED + OPERATED AFFILIATE OTT 26 May 2015 | SKY Investor Day 2015 Page 24

  25. Slide 25: Premium and Exclusive Content Supply Is as Crucial as Ever

    PREMIUM AND EXCLUSIVE CONTENT SUPPLY IS AS CRUCIAL AS EVER! For personal use only 26 May 2015 | SKY Investor Day 2015 Page 25

  26. Slide 26: Premium and Exclusive Content: The Biggest and the Best

    PREMIUM AND EXCLUSIVE CONTENT SUPPLY IS AS CRUCIAL AS EVER! For personal use only THE BIGGEST AND THE BEST 26 May 2015 | SKY Investor Day 2015 Page 26

  27. Slide 27: Consistent Output/Multiple Rights

    CONSISTENT OUTPUT/MULTIPLE RIGHTS For personal use only A CONSISTENT PIPELINE OF THE BEST • • MULTIPLE RIGHTS OVER MANY PLATFORMS • o o o o o o 26 May 2015 | SKY Investor Day 2015 Page 27

  28. Slide 28: Consistent Output/Multiple Rights

    CONSISTENT OUTPUT/MULTIPLE RIGHTS MOST CONTENT COMES WITH MEANINGFUL For personal use only • • LINEAR SUPPORTS OTT • • • Linear and OTT Programming teams integrated in 2015 GIVES US FUEL FOR OUR UNIQUE CONTENT AMORTISATION ENGINE 26 May 2015 | SKY Investor Day 2015 Page 28

  29. Slide 29: The Movie Tier Expansion

    THE MOVIE TIER EXPANSION For personal use only Frozen ©Disney. Available on SKY Movies Disney from July 2015. The Hunger Games. TM &© 2012 Lions Gate Entertainment Inc. All Rights Reserved. 26 May 2015 | SKY Investor Day 2015 Page 29

  30. Slide 30: The Movie Tier Expansion: Linear to VOD to SVOD 2014

    THE MOVIE TIER EXPANSION For personal use only LINEAR  TO VOD  TO SVOD 2014 • • • o o o 26 May 2015 | SKY Investor Day 2015 Page 30

  31. Slide 31: The Movie Tier Expansion: Linear to VOD to SVOD 2015

    THE MOVIE TIER EXPANSION For personal use only LINEAR  TO VOD  TO SVOD 2015 • • • • • 26 May 2015 | SKY Investor Day 2015 Page 31

  32. Slide 32: Bringing VOD to Our Customers

    BRINGING VOD TO OUR CUSTOMERS For personal use only LINEAR  TO VOD MYSKY UPGRADE ALLOWS CUSTOMERS GREATER CONTROL AND AN EXPLOSION OF VIDEO ON DEMAND (VOD): • Linear viewing options combine with: o PVR functionality o Reverse EPG access o Endless hours of VOD tied to their favourite SKY and Affilia

  33. Slide 33: SVOD/OTT in NZ: A Rationalised Approach

    SVOD/OTT IN NZ: A RATIONALISED APPROACH For personal use only • • • • • • 26 May 2015 | SKY Investor Day 2015 Page 33

  34. Slide 34: Sport

    SPORT For personal use only RICHARD LAST DIRECTOR OF SPORT FANATICAL ABOUT CHAMPIONS CHELSEA FC

  35. Slide 35: For personal use only

    For personal use only 26 May 2015 | SKY Investor Day 2015 Page 35

  36. Slide 36: Premium Content

    PREMIUM CONTENT For personal use only 26 May 2015 | SKY Investor Day 2015 Page 36 Copyright ©

  37. Slide 37: We Continue to Secure Premium Sport Content Key Properties

    WE CONTINUE TO SECURE PREMIUM SPORT CONTENT KEY PROPERTIES For personal use only SUPER RUGBY THE LIONS RUGBY CHAMPIONSHIP ALL DOMESTIC UPCOMING TOUR BY CRICKET AUSTRALIA ALL RACES QUALIFYING ANZ CONSTELLATION CHAMPIONSHIP CUP FIFA WORLD U17&U20 OTHER MAJOR CUP WORLD CUP COMPETITIONS 26 May 2015 | SK

  38. Slide 38: We Can Go Deeper or Cover More Live Sport With Pop-Up Channels

    WE CAN GO DEEPER OR COVER MORE LIVE SPORT WITH OUR POP-UP CHANNELS For personal use only DEEPER COVERAGE MORE LIVE COVERAGE 26 May 2015 | SKY Investor Day 2015 Page 38

  39. Slide 39: Making Local Content More Viable

    MAKING LOCAL CONTENT MORE VIABLE For personal use only BASEBALL FEWER STAFF PER EVENT BOXING LOWER HOCKEY PURCHASE PRICE HORSES FOR 1ST XV RUGBY COURSES FOOTBALL 26 May 2015 | SKY Investor Day 2015 Page 39

  40. Slide 40: Major Events: A Call to Action

    MAJOR EVENTS For personal use only A CALL TO ACTION CEMENT OUR POSITION AS PREMIUM CONTENT PROVIDER CONTINUE TO PRODUCE WORLD CLASS SPORTING EVENTS WE’RE IMPROVING THE ECONOMICS 26 May 2015 | SKY Investor Day 2015 Page 40

  41. Slide 41: Advertising Sales

    ADVERTISING For personal use only SALES RAWINIA NEWTON DIRECTOR OF ADVERTISING FANATICAL ABOUT SoHo

  42. Slide 42: Advertising Channels

    34 ADVERTISING CHANNELS For personal use only 26 May 2015 | SKY Investor Day 2015 Page 42

  43. Slide 43: Digital and Print

    DIGITAL AND PRINT For personal use only 26 May 2015 | SKY Investor Day 2015 Page 43

  44. Slide 44: Dollars Spent on Advertising in 2014 Increased 4.2%

    DOLLARS SPENT ON ADVERTISING IN 2014 INCREASED 4.2% For personal use only MILLIONS 26 May 2015 | SKY Investor Day 2015 Source: ASA Page 44

  45. Slide 45: Online Expenditure Breakdown

    ONLINE EXPENDITURE BREAKDOWN For personal use only 2014 SHARE $613M MILLIONS $311M $139M $128M $12M Source: ASA 26 May 2015 | SKY Investor Day 2015 Page 45

  46. Slide 46: Television Revenue Declined 3.9% in 2014

    TELEVISION REVENUE DECLINED -3.9% IN 2014 For personal use only 14.7 CALENDAR YEAR % CHANGE YEAR ON YEAR 8.9 6.5 3.9 3.3 1.8 1.9 1.8 -0.6 -3.9 -1.1 -12 RETURNED TO QUARTERLY GROWTH IN Q1 2015 % CHANGE YEAR ON YEAR 3% Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Jan-00 Feb-00

  47. Slide 47: Big TV Sport Events Continue to Grow TV Revenues and Shift Share

    BIG TV SPORT EVENTS CONTINUE TO GROW TV REVENUES AND SHIFT SHARE For personal use only Market 3.5% Market 3% SKY 23% SKY 14% RWC LIONS RWC COMMONWEALTH OLYMPICS CRICKET WC AUSTRALIA TOUR NZ FRANCE GAMES LONDON NZ OLYMPICS COMMONWEALTH OLYMPICS RUGBY WC COMMONWEALTH ATHENS GAMES BEIJING NZ GAMES 16.4

  48. Slide 48: Sport Drives Advertising Revenue

    SPORT DRIVES ADVERTISING REVENUE For personal use only 9% SHARE OF AUDIENCE IN SKY HOMES 37% SHARE REVENUE 26 May 2015 | SKY Investor Day 2015 Page 48

  49. Slide 49: In a Declining Market SKY Has Maintained Revenue YoY

    IN A DECLINING MARKET SKY HAS MAINTAINED REVENUE YOY For personal use only PERCENTAGE REVENUE CHANGE YEAR ON YEAR 3.00% 2.50% 2.00% 1.00% % CHANGE YEAR ON YEAR 0.00% 0.00% -1.00% -2.00% -3.00% -4.00% -3.90% -3.90% -5.00% 26 May 2015 | SKY Investor Day 2015 Page 49 Source: PWC

  50. Slide 50: Increased Share of Revenue

    INCREASED SHARE OF REVENUE JANUARY TO MARCH For personal use only 13.3% 2015 11.9% 2014 26 May 2015 | SKY Investor Day 2015 Page 50

  51. Slide 51: For personal use only

    For personal use only 26 May 2015 | SKY Investor Day 2015 Copyright © Page 51

  52. Slide 52: Changing Delivery Platforms

    CHANGING DELIVERY PLATFORMS For personal use only 26 May 2015 | SKY Investor Day 2015 Page 52

  53. Slide 53: New Audience Measurement Metrics

    NEW AUDIENCE MEASUREMENT METRICS For personal use only 26 May 2015 | SKY Investor Day 2015 Page 53

  54. Slide 54: TV Remains King

    TV REMAINS KING For personal use only 26 May 2015 | SKY Investor Day 2015 Page 54

  55. Slide 55: TV $40B, Display $12B

    TV $40B DISPLAY $12B For personal use only 26 May 2015 | SKY Investor Day 2015 Page 55

  56. Slide 56: No Other Medium Can Compete When It Comes to Delivering Reach

    NO OTHER MEDIUM CAN COMPETE WHEN IT COMES TO DELIVERING REACH For personal use only 3.6m New Zealanders watch TV every week 26 May 2015 | SKY Investor Day 2015 Page 56

  57. Slide 57: No Other Medium Can Compete When It Comes to Delivering Reach

    NO OTHER MEDIUM CAN COMPETE WHEN IT COMES TO DELIVERING REACH For personal use only 3+ hours per day 26 May 2015 | SKY Investor Day 2015 Page 57

  58. Slide 58: Digital Companies Understand the Power of Television

    DIGITAL COMPANIES UNDERSTAND THE POWER OF TELEVISION For personal use only 26 May 2015 | SKY Investor Day 2015 Page 58

  59. Slide 59: Marketers Are Becoming Increasingly Focused on Brand Safety

    MARKETERS ARE BECOMING INCREASINGLY FOCUSED ON BRAND SAFETY For personal use only 26 May 2015 | SKY Investor Day 2015 Page 59

  60. Slide 60: Kraft Foods Recently Rejected Digital Ad Impressions

    For personal use only “KRAFT FOODS RECENTLY REJECTED 75% TO 85% OF DIGITAL AD IMPRESSIONS DUE TO QUALITY CONCERNS” 26 May 2015 | SKY Investor Day 2015 Page 60

  61. Slide 61: Summary

    SUMMARY FUTURE ADVERTISING MODELS AND MEASUREMENT For personal use only • • • SKY ADVERTISING STRATEGY • • • • 26 May 2015 | SKY Investor Day 2015 Page 61

  62. Slide 62: Government Relations

    GOVERNMENT For personal use only RELATIONS CHRIS MAJOR DIRECTOR OF GOVERNMENT RELATIONS FANATICAL ABOUT SKY SPORT

  63. Slide 63: Three Key Items Feature on Our Regulatory Radar

    THREE KEY ITEMS FEATURE ON OUR REGULATORY RADAR For personal use only • Telecommunications Act review • Regulation of online content • Copyright Act review 26 May 2015 | SKY Investor Day 2015 Page 63

  64. Slide 64: Gearing and Dividends

    GEARING AND For personal use only DIVIDENDS PETER MACOURT CHAIRMAN OF THE BOARD IRRATIONALLY OPTIMISTIC ABOUT THE WALLABIES

  65. Slide 65: Gearing and Dividend Decisions Are Driven by Some Key Factors

    GEARING AND DIVIDEND DECISIONS ARE DRIVEN BY SOME KEY FACTORS For personal use only • Optus satellite commitments of $30+m pa to 2023 • STB replacement program in excess of $100m over 18 months • We capitalise STB and Install costs of approx. $50m in FY15, others Expense these costs • TV station ass

  66. Slide 66: Q&A

    For personal use only Q&A

  67. Slide 67: Thank You

    For personal use only THANK YOU 26 May 2015 |

Sky Network Television — Investor Day (May 2015) on 6ix