Exclusive Interview: Sky Deutschland’s Gary Davey

PREMIUM: Gary Davey, the executive VP of programming at pay-TV platform Sky Deutschland, tells World Screen about his approach to acquisitions, nonlinear deals and windowing.

WS: Can you tell us about your recent output deal with Tele München?
DAVEY: One of the unique things about Germany is the influence of the big independent distributors. Tele München controls the rights to a lot of very high-quality programming. We have agreements with all of the Hollywood majors and the independents, so it’s quite complex. I was really anxious that we get a deal with Tele München, because of the quality of the inventory—there are 41 titles over the next two years, and they’re all very good, including Twilight.

WS: Are all the programming deals you’re doing inclusive of rights for your nonlinear services?
DAVEY: That is our goal, to whatever extent we can. This is a work in progress for the industry worldwide. Our ambition with all suppliers now is to negotiate a position where we have not only the linear but the catch-up rights for Sky Anytime, and the SVOD rights. We recently introduced series on Sky Anytime for the first time. Up until that moment it had lots of movies. When we added series to it we did this carefully, and we were very selective about what we used. We have Mad Men, The Walking Dead. And then there is our mobile product, Sky Go. Today it is for the iPad, iPhone, the Internet and soon the Xbox 360. Currently we offer sports and movies, but we will launch series, documentaries and kids’ content aggressively over the coming months. The industry is still evaluating how one can achieve this without damaging adjacent windows, without overexposing product, and without damaging the core linear pay-TV product. And of course, how you do it without damaging the free-to-air advertising supported market. We’re all part of this process but I think we’re heading towards a set of rights that will make sense to everybody. Once established, it will be a universal standard over the next couple of years.

WS: How have negotiations been with the distributors for nonlinear rights?
DAVEY: The studios…they’ve got different issues to balance. That balance is sometimes complicated because of the many different tiers, and different windows. For each market these are valued differently. Germany, for example, the DVD window and the free-to-air window are still very valuable. To protect copyrights and maximize revenues is quite understandably the ultimate goal [for the studios], while we have to serve our customers in the best possible manner and therefore enable the best possible offer.

WS: How do you manage the windows across your linear, on-demand and mobile platforms?
DAVEY: During the pay window, which is typically 12 months, the question is, how do you use the nonlinear rights during that period and what’s the best experience for the consumer altogether? This is a learning process, for all of us, every day.

WS: What have been the obstacles to the growth of pay TV in Germany?
DAVEY: I think there are quite a few factors. Some of these are the same we’ve encountered in other markets. Some not. We always hear the same comment: “This country’s different. People won’t pay for television. They’ve already got very good television, why would they want more? And even if they wanted more, why on earth would they pay for it?” Well, that is exactly what I’ve experienced in all of the markets, including the United States. But if you find a point of difference and answer the question of where’s the value, then the answer is yes, and of course, pay TV can work.

The pay-TV business in Germany had its issues over the years; there were lots of stops and starts in its history. However this business needs a lot of commitment, a lot of continuity, a lot of consistency and a lot of determination. I think we’re in progress through that cycle. Our CEO Brian Sullivan has done a fantastic job on two levels. He has improved the company’s trust level with the public, because whenever you see a flat spot in the sales chart, it’s normally associated with an event that had created doubt or confusion in the marketplace. Brian has done a terrific job of working through that and also putting us right at the cutting edge of the technology trajectory. That is equally important—even more to the younger target groups. They really want to know they’ve got a product that fits their lifestyle. Linear television, while it’s going to be around forever and it’s perfect for the majority of the public, is not enough for some target audiences. As we’ve seen from the viewership of traditional television, it’s just getting older and older, and that’s partly because younger people are becoming less and less interested in a two-dimensional, non-interactive medium. It’s very important we are engaged with that world because at the end of the day, they decide what is and what isn’t cool.

WS: What impact will over-the-top services like Hulu or Netflix have on pay TV in Europe?
DAVEY: Currently none because these companies are not really operating here. However, wherever there is a meaningful penetration of broadband Internet, there will be over-the-top services. There’s no doubt. And there’s room for that.

WS: Sky in the U.K. has put a lot of resources into original programming. Do you see Sky Deutschland moving in that direction?
DAVEY: It’s going to be an ultimate sign of our maturity—when we get to the point when we’re ready for that. We’ve started some really interesting conversations with producers and writers about the future. No commitments today. Again, we are not ready for this today, but there is always a tomorrow.