Sunday 15 December 2019

Sky boss believes the future of TV is arriving right on Q

Sky Ireland managing director JD Buckley told Sarah McCabe the company is well placed to roll out high-quality TV

Cartoon of Sky Ireland managing director JD Buckley
Cartoon of Sky Ireland managing director JD Buckley

At Sky's busy offices on Burlington Road in south Dublin, nobody looks a day over 30. The average age of the 800 or so people who work there is 26, managing director JD Buckley tells me with a smile. Buckley - who is 43 - says it makes him feel old.

Those 800 work out of just one office. But when you include its 300 engineers, the 130 new jobs being created at a customer service centre run by Abtran in Cork and other support staff, Sky employs around 1,400 people in Ireland.

It is a massive acceleration from the 40 people it employed in Ireland just five years ago.

Sky has been in Ireland for a long time; the company has sold its TV packages in this country since its foundation in the late 1980s. But it was only in 2012 that it made a "step change" decision to invest heavily in Ireland and enter the Irish broadband market the following year, in a fresh challenge to what was then Eircom (now Eir) and UPC (now Virgin Media).

A €1bn, five-year investment plan was put in place and father-of-three Buckley was appointed to lead it.

He was previously chief executive of the North Caribbean arm of Digicel. He spent five years living in the Cayman Islands, Jamaica and Bermuda, before returning home in 2008, eager for his kids to grow up in Ireland. He ran his own telecoms consultancy business for several years before taking the top job at Sky. Sky Ireland's progress in the years since his arrival and the "step-change" decision appears to have matched the pace of expansion in its staff.

Nielsen figures suggest that over 700,000 homes - about 40pc of the market - have a Sky box. A healthy percentage of those customers have also signed up for internet, Buckley says.

"We are now the fastest-growing broadband provider in the country," he tells me over coffee from a corner office with a great view over Dublin 4.

"We have about 10pc of the fixed broadband market. We launched Sky fibre [superfast broadband] this time last year and are seeing great uptake for our fibre product. About 60pc of our broadband sales are fibre now. Since 2013, we've been about far more than just TV."

A concerted campaign targeting its TV customers who haven't yet signed up for broadband is underway. The plan is to have 400,000 homes connected to Sky broadband by the end of the year, he tells me.

Sky reported record half-year profits at group level last month. It said operating profits in the six months to the end of December rose by 12pc to £747m (€970m).

It also announced the return of James Murdoch as chairman, four years after he stepped down as a director of the business when his father Rupert Murdoch's News International was caught up in the UK phone-hacking scandal.

"James was CEO of the business before my time and the word around Sky is that he was a fantastic CEO. I think he'd be a great chairman," says Buckley. "It's very welcome."

The company, which has operations in Germany, Austria and Italy, as well as Ireland and the UK, also saw a 5pc increase in revenue to £5.7bn.

Subscriptions, rather than advertising, drive revenue. Ads account for only about 10pc of revenue, Buckley says.

Sky does not break out its Irish results from those group numbers - so he won't tell me whether Ireland is under- or out-performing the UK or group business.

"What I can say is the Irish business is performing very well and we have what all businesses want - momentum."

Discussing the reasons for that growth, it's clear content is king. The Sky group spends €6bn every year on content across all the markets it operates in - UK, Ireland, Germany, Austria and Italy - making it Europe's biggest investor in content.

There is no dedicated Irish channel - instead, he says, "we try to have as much great Irish content across as many of our channels as we can."

Irish-made shows include Chris O'Dowd's Moone Boy, which is in its third season. (Sky is in talks with O'Dowd to do a movie.) There are also the Irish customs show Stop, Search and Seize and Baz and Nancy Ashmawy's 50 Ways To Kill Your Mammy, which is in talks for a third season.

The company's production arm loves to use Irish talent, Buckley says, most recently Robert Sheehan - the Love/Hate star will front the second season of Sky Atlantic series Fortitude, which Buckley intriguingly describes as an "Arctic noir" big-budget drama.

Sky sells shows like Fortitude and 50 Ways to Kill Your Mammy to other broadcasters all over the globe; Ashmawy's programme sold in over 100 territories, he says. Buckley's own favourite show is Girls - Lena Dunham's feminist love letter to 20-something women. Its 'Invest in the US' strategy includes a deal with HBO, so Sky Atlantic viewers have access to Girls as well as Game of Thrones - the biggest show since Breaking Bad.

Locally it has also inked deals with TV3, UTV and RTE; the RTE player will soon feature in Sky's On Demand offering.

But it is the company's recent sports deals where Buckley lingers longest when talking about content. It has just won the hotly contested rights to air Saturday 3pm matches from Setanta, "something that was dear to them - in our view their proposition is significantly weaker now".

This means that 2016 Irish Sky Sports customers will have access to 33 more Premiership football matches than UK Sky customers, he says proudly - a total of 159 live matches, or 80pc of all televised Premiership games, starting in August.

"For the first time ever, we have more Premier League content bought in Ireland than in the UK," he says.

In the UK, the Premier League doesn't sell the live rights to 3pm Saturday matches because it wants to encourage fans to attend the matches. Irish Sky Sports customers will also get access to all four golf majors for the first time ever this year.

The company is also on its third season of GAA coverage.

"We think we've brought something different to GAA coverage. We try to focus on the nuances of the game, rather than personalities," says Buckley.

In rugby, it will broadcast just over 300 live matches to Irish customers this year, including the ERCC, the Pro12 and Ireland's tour of South Africa in June.

In the midst of all this comes the launch of a brand-new high-end TV product, Sky Q, which responds both to Sky's traditional competitors and newer online-only content providers like YouTube and Netflix. Sky Q involves brand-new Sky boxes, an overhaul of the user interface, increased integration of apps and web videos and a touch-based remote. Users can download recorded shows to watch on their tablets later on - with or without an internet connection - or start viewing a show in one room of their house and finish it in another at the touch of a button. It's all very slick.

The Irish operation is now about half-way through the €10bn, five-year investment programme decided upon in 2012. Enhanced customer service was one of the big things achieved, Buckley says.

"Hiring basically 800 people in Burlington Plaza to handle the 50,000 customer interactions we get per week, providing best in class customer service, whether people call us on the phone or talk to us online or whatever. Being there for our customers when they need us.

"We try to get our customers talking to a person as soon as possible. In comparison to our competition we have got much longer opening hours, we are open through weekends, we have introduced live chat.

"We have the Sky service app with about 50,000 downloads, where customers can do transactional stuff that traditionally they would have to pick up the phone to do."

Like Vodafone, Sky does not own the physical infrastructure that provides its customers with internet; it rents this from network owners Eir and BT.

Speaking of Vodafone, I wonder how Buckley felt when he heard the announcement that the mobile network and broadband provider plans to move into the paid-for-TV market in Ireland this year - meaning a new rival for Sky.

"We welcome competition... We've shown over the last three years that we are well able to compete with new entrants. Sky Q is going to prove again that we can stay ahead of the market," is his swift response.

Sky will not play a part in connecting rural homes as part of the National Broadband Plan, the taxpayer-funded scheme which will provide high-speed broadband to 750,000 homes in harder-to-reach parts of the country. But "we will probably be the biggest customer of whoever wins the National Broadband Plan contracts," says Buckley.

"At the end of the day, we have proven we can drive demand. We spend over €10m a year on brand marketing in Ireland. We are in the top three advertisers in the country. Whether we use assets like Kung Fu Panda or assets like David Beckham, we have shown we can stimulate demand.

"I think that's encouraging for those parties who are bidding for the National Broadband Plan - that there is a customer like Sky which will be ready and willing to use their networks.

"We are pretty agnostic as to how it's done - at the end of the day, it's important that households who are poorly served get the minimum speeds that the Government has set out.

"We think that fibre to the home is probably going to be the technology that is most likely to be adopted, because wireless technology probably isn't developed enough to get the kind of consistency in speeds."

Ireland's access to high-speed internet "is probably weaker than the UK, though it's fast catching up," he says. "Already fibre is available in a million households and Sky fibre is available in almost all of those. But there are areas that are underserved.

"The National Broadband Plan is a once-in-a-generation opportunity to really change how we deliver broadband to those underserved areas. And I think we can potentially leapfrog other European countries. Basically, the sooner we can get it up and running, the better."

Paid-for-TV in Ireland is much cheaper then in the US and broadly in line with the UK, he says - but Irish broadband pricing is more expensive than average.

"We're doing all that we can to lobby [telecoms regulator] ComReg and ensure that the pricing that we get from Eircom on a wholesale basis is as low as it can be."

A review of wholesale line rental prices is currently taking place. "I don't want to pre-empt what that review is going to say but we believe costs should come down fairly significantly"

Sky and rivals like BT are also lobbying for a change in how Eir treats them in comparison with its own retail arm, with which they compete.

Sky and BT claim preferential treatment is given to Eir's retail arm. This "has a material impact on our business and our customers," Buckley says.

'Be ambitious - but indulge in good tv'

What do you do in your free time?

"Free time? I mostly ferry my kids around at weekends. I have three boys - aged 10, 9 and 8 - who have a lot going on! And I play tennis and run a lot and do a lot of watersports. I actually passed Anne O'Leary [chief executive of Vodafone] on a run the other day."

What is the best piece of business advice you ever received?

"Be really ambitious. Jeremy Darroch, CEO of the Sky Group, always talks about it - reach for the stars, both in business and in your personal life."

What's the last good meal you enjoyed?

"Dinner at home in Dalkey made by my wife Fleur. She is a great cook."

What book are you reading right now?

"Blood Feud: the Clintons versus the Obamas by Edward Klein."

What is your favourite television show?

"HBO's Girls. It's brilliant! The writing is really great. Lena Dunham - creator, writer and star of the series - is just fantastic."

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