Changing Times at Sky
The end of January saw the return of the much maligned figure that is James Murdoch return to Sky as Chairman, four years after quitting the role at the height of the phone hacking scandal in 2012. His resignation came as Ofcom investigated the scandal of The Sun newspaper, owned by the Murdoch’s News International. The resignation did not leave him in the wilderness by any means- he kept a non-exec board seat at Sky and remained as deputy chief operating officer of News Corp, the parent company of News International and the owner of a 39% stake in Sky - this stake may prove to be a bone of contention.
The market initially saw the appointment as positive move for the company, with shares in Sky increasing more than 2% the first morning following the news, with analysts seeing that his deep knowledge of the international media industry will be a “huge asset” as Sky expands. This is following on from a 13% rise over the past 12 months, against the FTSE trend of a drop of 9.7% in 2015. However the first 11 days of February saw the price drop 11%, with some suggestions that there is a conflict of interest in his appointment.
The appointment is viewed by many analysts as a precursor to a renewed attempt by Fox (News Corp) to take over full control of Sky. Speculation of his intentions for Sky have been subject to intense City and media industry speculation for months, with questions over whether they were more likely to make a takeover bid or sell Fox’s stake.
Fox was forced to give up on an £8bn-plus bid to take full control of Sky in 2011 as the fallout from the phone-hacking scandal made it too politically difficult to complete. If Fox was to make a new bid for Sky there is an argument that there is not a strong independent chairman to protect the interests of minority shareholders- if the vote is tied it would go to the Chairmen, who has involvement on both sides adding to argument he won’t be able act impartially.
February 12th 2016 was the launch of Sky’s new set top box with the what they claim is the “biggest and most ambitious advertising campaign ever”, describing it as the “most anticipated launch in TV tech in years”, the company hopes that Sky Q could help it fend off the growing competitor threat from the likes of BT, Virgin and online video services like Netflix. Sky Q’s a complete hardware and software refresh that aims to completely rethink the way we consume and find content on the broadcast giant’s network.
At the heart of the Sky Q package is the Sky Q Box, essentially an advancement of the Sky+ HD box- 4k capability, which can output to multiple Sky Q Mini boxes – pushing content to additional screens in the house, a swish new Bluetooth remote, a sharp image (heavy UI), and improved tablet and smartphone integration, proving something that looks to be a strong evolution of Sky TV experience. Sky are yet to confirm when the 4k capability will come in to effect however, and what this could cost people.
On paper, there's a whole lot going for Sky Q, making improvements in all the right places, adding future proofing features that should ensure the next generation set-top box is around for some time and which people will no doubt be keen to test. It will be exciting to see what impact this and the effect of James Murdoch have on Sky, who to date has managed to fight off all competition to become the UKs number one connected TV platform in 40% of all homes in the UK and Ireland.