With the exception of having to swallow a large write-down on its investment in Kirch the failed German
With the exception of having to swallow a large write-down on its investment in Kirch, the failed German media group, Sky has been showering the City with good news over the last 12 months.Now making money, Sky is on course to have 7 million subscribers by the end of next year. It has seen one of its competitors, ITV Digital, go bust while another, NTL, filed for Chapter 11 bankruptcy protection and the third rival, Telewest, is groping its way towards its own financial restructuring. And, in a deft piece of diplomacy, Sky jumped into bed with the BBC to emerge with three channel slots on the free-to-air digital terrestrial platform vacated by ITV Digital.Now Rupert Murdoch’s Sky has pulled off a real coup in recruiting Ms Airey. Tony Ball wasn’t even looking for someone new to oversee Sky content until he read, to his surprise, that Ms Airey had been approached by ITV.Mischievous and highly aggressive, Mr Ball may have poached Ms Airey just to spite ITV But her appointment is much more significant than that. It signifies Sky’s ambitions in overhauling its programming and a plan for a future in which it will have a mass-market terrestrial channel.One BSkyB source said: “This [Ms Airey's appointment] is about our long-term play in content. Our distribution is very strong through three platforms [satellite, cable and digital terrestrial]. Now we need to make sure we have the right content offering.”Under Ms Airey, the company will create new channels, including Sky-branded music channels and a new general entertainment channel that will sit alongside Sky One.
Over the next few years, a number of Sky’s content deals with Hollywood studios and others come up for renewal and, with its new programming supremo, the broad-caster will rethink what it needs. For instance, Sky currently has a deal with every major Hollywood studio, but in future one or more of these may be dropped.Mr Ball said: “Sky has an excellent suite of channels, and is securing wider and wider distribution for them every day. [Ms Airey's] role will be to develop Sky’s content offering as our channels become available to everybody.”Sky sources said the company can be expected to commission more much original programming under Ms Airey – the model here appears to be the awarding-winning broadcaster HBO in the US, which has churned out hit after hit.But as Mr Ball hinted, it is Ms Airey’s experience of free-to-air television that is perhaps most compelling for Sky. The BBC has let Sky into the free TV game by giving it slots on the digital terrestrial platform For the first time, Sky has moved beyond its pay-TV model This is a new strategy and Ms Airey fits perfectly into it.
Conor O’Shea, an analyst at BNP Paribas, said: “There’s real ambition at Sky to build a sizeable free-to-air channel. It will then have two markets [free and pay] that don’t impinge on each other and perhaps look to dominate both.”Sky isn’t currently planning to offer an entertainment channel in any of its three slots on digital terrestrial but that is likely to change. Ms Airey’s skills will be put to good use working up just such a channel that Sky will put on to digital terrestrial when it has built a big enough audience. With these routes into British households, Sky will be available to everyone long before the analogue signal is switched off, which is due to happen by 2010.That future mass market terrestrial channel from Sky is going to provide direct competition to ITV, Channel 4 and Channel 5. Run by someone as capable as Ms Airey, this is bad news for these established terrestrial broadcasters But the new Sky will also compete with BBC1 for viewers.
