Since its launch 30 years ago, Sky has continuously provided its subscribers with choice, whether TV series, entertainment and factual programming from around the world, Hollywood blockbusters, news or sports.
What started as Sky Television in the U.K. in February 1989 has grown over the decades to an offer that includes international pay-TV channels, movie channels and Sky’s flagship brands: Sky One, Sky Atlantic, Sky Arts, Sky Witness, Sky Cinema, Sky News and Sky Sports.
With the acquisitions of pay-TV companies in Germany and Italy, renamed Sky Deutschland and Sky Italia, respectively, Sky has expanded beyond the U.K. Today, Sky has 23 million subscribers across the U.K. and Ireland, Germany and Austria, Switzerland, Italy and Spain.
Sky has built its business on three pillars. The first is content, as a way to attract and retain subscribers. From the beginning, the company flanked its vast array of programming with the second pillar, innovation, which it provided through a range of devices, products and services, including Sky Go, Sky Q and NOW TV—all designed to enhance the viewing experience and extend Sky packages beyond the traditional linear platform. And the third pillar is customer service, and Sky takes pride in its relationship with subscribers.
Gary Davey was appointed Sky’s managing director of content in January 2015, but he has been with Sky and its then parent company, News Corporation, since before Sky’s launch 30 years ago. He has been the CEO of Star TV in Hong Kong and he has worked at Sky Deutschland—where he is still executive VP of programming—and Sky Italia, where he oversaw the launch of the terrestrial TV channel Cielo.
Davey has overseen Sky’s push into original productions, which includes the acclaimed Patrick Melrose and A Discovery of Witches and the upcoming HBO co-productions Chernobyl and Catherine the Great.
Davey talks to World Screen bout Sky’s three decades, from a fledgling pay service that no one in the industry took seriously to its success in establishing itself as a leading media company. In addition, Sky can now have international aspirations with the backing of its new owner, Comcast Corporation.
WS: Innovation and customer service, driven by content, have been hallmarks of Sky. What have been some of the most significant content offerings Sky has given its customers?
DAVEY: Sitting here on my desk is a fabulous old thing I made a long time ago—it’s a three-legged stool. On one leg is the word “service,” on the second leg is “content” and on the third leg is “innovation.” The idea behind that metaphor is, if you take one of those legs away, the whole thing becomes useless. It’s funny how that stuck over the years as a very good metaphor to describe the DNA of the business, because they are completely interlinked and that’s what makes us unique.
On the content side, I think the single biggest achievement was reaching momentum on original productions in the past four years. The company has always wanted to be in original production—there was the occasional fine production—but it was challenging to get to the right momentum and quality level. Now we’ve done a pretty good job at getting what we call a “cadence of originals.” Part of getting that right was also figuring out how to build a monetization model around the creative, but it was hard for us to find ways of funding a big production. At the green-light stage, all you’ve got are bits of paper, typically, and getting funding behind that is always challenging because you don’t want to be wandering around Los Angeles waving draft scripts in front of people—it doesn’t seem to work well. So we were always frustrated about not quite having the monetization model. It took a long time to build up enough momentum, trust and relationships to have the courage to commit and carry the risk of deficits. That was an important thing over the past three or four years, to the point where this calendar year, we have 38 Sky originals on air across multiple genres, and 21 of them are returning. Momentum, quality and returnability are combining to make us feel like we have a nice trajectory now.
There is so much I am proud of. In 2015, we very bravely launched a show called Fortitude, and we [recently aired] its third season. It was quite brave to make a show like that in the Arctic Circle, and it was a complex, challenging story. That was an important starting point, and the momentum has continued. I’m hugely proud of Save Me. It’s become the poster child of our commitment to authentic British stories. The success of that show has energized us to focus on a big, authentic approach to storytelling, which is something that I think the FAANGs are always going to find hard to compete with because they have to serve a global market. They are always going to find it hard to get deeply authentic. Now that we have reached this momentum, we don’t quite have to rely on the international market as much as we once did to fund our investment. That liberates us to get into British stories. Obviously, we all prefer to have our shows sell successfully internationally, but we are at a point now where that is not essential. That particularly applies to comedy, where we are investing heavily. Comedy has always had difficulty traveling, and we are going 100 percent native on our comedy objectives. That is going to be a big differentiator between ourselves and Netflix and Amazon and whatever other OTT platforms come along.
WS: Tell us about Sky Studios.
DAVEY: We think it’s an important part of the future. We’ve always believed in the traditional independent model. It works; it’s unlikely we would do production in-house, per se. However, I think there is an opportunity to provide smaller entities with all the infrastructure and support and production services that are normally reserved for the big production companies. That’s what Sky Studios is all about. We just don’t know where the next great idea is going to come from. We want to be nimble enough so that we can bring in the pure raw creative, attach it to infrastructure and fast-track development. The idea behind Sky Studios is to have a safe, well-organized, well-resourced entity that small indies or an indie creative can come in and call their home for the duration of a project. All the way from office space, to research, to legal, to finance, technical services, cameras, etc.
WS: What message do you want to give the creative community with Sky’s original productions? What kind of partner do you want to be to writers and showrunners?
DAVEY: Part of the task of the past four years has been to build a sense of trust with the creative community [and let them know] that we take good care of the originating creative. When we go into production, we support the process and do as good a job as we possibly can on marketing and promotion. We’re in a good place now, so we want to create an environment where great creative people want to come and do their best work.
There are a couple of things going on I am so proud of: my two favorite Janes! I’ve got lots of Janes, actually, and I love them all dearly, but if I can single out two; first, Jane Featherstone. It’s a great privilege to work with someone of the caliber of Jane Featherstone, but the Chernobyl project will be—and this is a personal observation—the most important thing we are likely ever to make. My other favorite Jane is Jane Tranter, with whom we have a three-season commitment for A Discovery of Witches. The first season was brilliant. Working with Jane and her team has been a real privilege, too. If we can keep working with people of that caliber and remain committed to projects of that quality at the right scale with the right momentum, we’re going to be in a good place.
WS: With all the value of originals, what role does acquired content play?
DAVEY: It’s critical across three content brands. The first is Sky Witness, which is hugely successful. It’s up 20 percent, year on year, after the rebranding from Sky Living to Sky Witness. Sky Witness is all acquired programming—beautifully crafted procedurals in all the categories you’d expect—medical, police, military and legal. The second is Sky One, which is very heavily dependent on acquisitions. For 30 years, it’s been the home of The Simpsons. We’ve also worked hard with Warner Bros. and The CW network to be a good home for superhero shows. We also have shows like Modern Family; it’s an eclectic mix, but it’s family friendly and highly entertaining. Those acquisitions sit very nicely alongside carefully selected drama and comedy productions on Sky One. And Sky Atlantic is about one-third HBO, one-third Showtime and one-third Sky original productions. Sky Atlantic is a unique proposition; it’s something that sets us apart from any other pay-TV platform in the world. Nobody else can boast the combination of those three sources of high-end, serialized drama.
WS: How are Sky Deutschland and Sky Italia doing? I know Italy is in a horrible situation right now, politically and economically.
DAVEY: My wife is Italian, and she puts me through the agony of watching the Italian news every evening; oh my lordy, what happened today!
I worked for about five years in each, Germany and Italy, and the way they have evolved is just brilliant. On original production, they have both done extraordinary things. I’m enormously proud of Sky Deutschland’s drama output. I irritate the drama team here in the U.K. when I say Babylon Berlin was the best thing we ever made! It is a beautiful piece. We recently launched Das Boot in the U.K., and it is a huge hit. It’s by far the most successful foreign-language show we’ve ever streamed in the U.K. It’s right up there competing with some of our English-language shows. It was also the most successful Sky original import on Sky Italia. And Italy is doing some great work, too. They have been very aggressive in formats for a number of years, with The X Factor, MasterChef, Got Talent and three of their own formats, and they’ve also done brilliant work in drama. We’re coming up on the second season of The Young Pope, The New Pope; it’s really something. It’s going to be great. They are also very proud of the tentpole they have created in Gomorrah. They managed to reinvent that proposition year after year, and with a loyalty to the stylization of the storytelling that is quite remarkable. Italy and Germany are hitting their stride in production, and the way they sit alongside the U.K. material is brilliant.
WS: What have been the highlights of the many years you have been at Sky?
DAVEY: The Sky News story is quite remarkable. I remember late in 1988 when we were running up to the launch, and people were saying, How the hell are you going to fill a 24-hour news channel? While we were rehearsing, a group of Libyan terrorists blew up a Pan Am jet over a little Scottish village called Lockerbie. There was this sudden realization: Oh my God, in this big event there are 1,000 stories. Then 1989, our launch year, the Berlin Wall came down. There was never any doubt that news was going to be a fundamental part of the DNA of our company, so I’m very happy with that.
I was away for a long time; I left in 1994 and went to Hong Kong as CEO of Star TV, but I remember I was on the other side of the world at the time, and I read in the press clippings that Sky had been voted the most admired company in Britain. This was some years ago, and I wrote Jeremy [Darroch, Sky’s CEO], Well, who would have thunk it?! It was a moment for me. Not that those kinds of awards pay the rent or mean terribly much, but it was such a remarkable journey from the way we were pilloried and laughed at and written off as being a complete waste of time in the early ’90s. And then to watch the company evolve into what it’s become, and for the world business community to value our company so highly, for me was a feeling of incredible pride.
WS: As you look ahead, how do you see content evolving? Are VR or immersive experiences possible?
DAVEY: We launched Sky VR Studio about three and a half years ago. I have to admit, I was a little skeptical at the beginning. But I’ve become a believer; over time, it is going to become a legitimate entertainment platform. The problem today is that it doesn’t have a proven business model. One of the most important parts of my life is not so much ratings but value perception. My most important KPI [key performance indicator] is simple. We ask our customers, Does Sky offer content that’s worth paying for? And if you think about it, as a pay-TV platform, if that’s all we get right, well, nothing else matters. With VR, we struggled with the business model. How can we justify continuing investment in both the technology and the utility on multiple platforms, which is another capital-expenditure cost, and creating a critical mass of original content for it? In our case, we created a value halo around the idea by making it exclusively available to our VIP customers. Therein lies the value. We are unique in having a justifiable financial rationale for continued investment in it. It’s pretty tough elsewhere in the business. There are a lot of clever, creative people trying to find solutions to the issues around VR and AR, but what they are struggling with is, how do you justify continued investment in technology and content when you don’t have a reliable business model?
Having said that, it will happen over time. The good news for us is, there are a lot of well-funded tech companies around the world who are competing like crazy on the hardware end, on the headsets, the next generation of user technology, so we don’t have to spend any money there. There are all kinds of interesting things happening there, and we are a little bit ahead of the game because we have the motivation.
WS: Everybody is talking about streaming services. Sky offers content on linear, on-demand and streaming. Do you feel you are well positioned for the future?
DAVEY: We [began] our first on-demand services 13 years ago, so we’ve known lots about it, and we know how hard it is. Most of the American pay-TV companies have grown up in a world where—this is oversimplifying it—but basically their distribution arises out of angry negotiations with seven to eight cable companies. With a direct-to-consumer OTT business, you grow the business one customer at a time. It’s a fundamentally different thing, and to build a supremely sophisticated customer-service culture is fundamental. I remind my staff often that our greatest opportunity is also our greatest responsibility, and that is for 30 years, millions of families have given us permission to take money from their bank accounts. I take that responsibility seriously. That relationship of trust, and the responsibility of delivering service, content and innovation that are worth paying for, is really at the heart of our culture. It’s not easy. It’s taken a long time for us to get good at it, and it’s a journey that never ends. We’re never good enough. The whole “Believe in Better” slogan came from good is not good enough. OK is not OK. You have to believe in better. So it’s a constantly evolving journey. I’m not convinced that all of the OTT ambitions are going to play out as currently described.
Nonetheless, we are happy to compete. We are really at our best when the competition is hot. We’ve got momentum and a relationship of trust with our customer base that is going to be very hard for anybody else to undermine.
WS: What benefits do you expect to derive from being a part of Comcast Corporation?
DAVEY: I’m really happy with that outcome. It’s been hard for us over the years, originally as a U.K. company, then as a European company; not having any global leverage was always tough. Now, to be part of Comcast is a fantastic opportunity. The good news is that at the heart of Comcast is a platform culture, so we can speak in shorthand. They understand the platform culture. They are also in almost identical technology spaces as us; slightly different in content spaces, but that’s an opportunity. As we come closer together, we will be able to take advantage of our various strengths in different parts, whether it’s in service or content or innovation, and then scale it up on a global level. It’s a fantastic opportunity.