Bear Stearns Media Conference 2008


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Bear Stearns Media Conference 2008

  1. 1. SKY IN THE UK ENTERTAINMENT Bear Stearns Media Conference 2008 & COMMUNICATIONS LANDSCAPE March, 2008
  2. 2. Forward-looking Statements This document contains certain forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 with respect to the Group's financial condition, results of operations and business, and management’s strategy, plans and objectives for the Group. These statements may include, without limitation, those that express forecasts, expectations and projections with regard to the potential for growth of free-to-air and pay-TV, advertising growth, DTH subscriber growth, Multiroom and Sky+ penetration, telephony and broadband penetration, DTH revenue, profitability and margin growth, cash flow generation, programming costs, subscriber management costs, administration costs and other costs, and marketing expenditure, capital expenditure programmes and proposals for returning capital to shareholders. These statements (and all other forward-looking statements contained in this document) are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the Group's control, are difficult to predict and could cause actual results to differ materially from those expressed or implied or forecast in the forward-looking statements. These factors include, but are not limited to, the fact that the Group operates in a highly competitive environment, the effects of government regulation upon the Group's activities, its reliance on technology, which is subject to risk, change and development, its ability to continue to obtain exclusive rights to movies, sports events and other programming content, risks inherent in the implementation of large-scale capital expenditure projects, the Group’s ability to continue to communicate and market its services effectively, and the risks associated with the Group's operation of digital television transmission in the UK and Ireland. Information on the significant risks and uncertainties are described in the "Risk Factors" section of Sky's Interim Report on form 6-K for the half year ended 31 December 2007. Copies of the Interim Report on form 6-K are available from the British Sky Broadcasting Group plc web page at All forward-looking statements in this presentation are based on information known to the Group on the date hereof. The Group undertakes no obligation publicly to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 2
  3. 3. JUSTIN FIELDER Director, Research Design & Customer Technology 3
  4. 4. Core Strengths Driving Customer Growth • Capitalising on core capabilities: – Delivering high quality content over flexible infrastructure – Innovative products – Value – Customer experience – Trusted brand • Customers are responding: – 8.8 million customers have chosen Sky – One in two already choose an additional product – Strong start to broadband and telephony 4
  5. 5. Broadband and Telephony – Challenging the Incumbents • Largest fibre optic all-IP network in the UK – Durability to meet customers’ future needs Major network POPs • 70% coverage c.1,200 exchanges Existing Easynet exchanges • Value for customers New exchanges • Strong response from customers – Over 1.2 million broadband customers – Over 1 million telephony customers 5
  6. 6. Hybrid Network High Bandwidth Satellite • National reach • Unlimited bandwidth • Cost efficient, scaleable PVR Broadband • Cost Effective • National reach • Flexible • Two way connectivity • Expandable • Ease and cost effectiveness of network build 6
  7. 7. Unified TV Customer Interface Satellite Broadband On-demand Content PVR Unified Customer Interface
  8. 8. Well Positioned • Hybrid network • Executing on network advantages • Well positioned to grow 8
  9. 9. STEPHEN VAN ROOYEN Director, Product Management 9
  10. 10. Well Positioned Customer Satisfaction Value Sky TV Sky Broadband Sky Talk Content Customer Product Sky One Experience Sky+ Sky Sports Simple Sky HD Sky Movies Personal Sky Anytime HD programming Reliable Brand 10
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  12. 12. Products: Control and Flexibility of Content with Sky+ Sky+ Net Customer Additions (000) 35% • Over 3 million Sky+ households • 35% penetration of customer base 23% • Benefits – High satisfaction 16% – Lower churn 8% – Strong advocacy 434 4% 254 276 • Strong usage 168 – 18% viewing share in Sky+ homes (1) 129 – 335 million instances of time-shifting Q2 04 Q2 05 Q2 06 Q2 07 Q2 08 using Sky+ in December (2) Net Customer Additions Penetration of customer base (1) Source: Sky View Oct – Dec 2007 (2) Source: Sky View Dec 2007 12
  13. 13. Products: High Definition TV • 15m HD ready TVs by 2010 (1) • The UK’s only national HD provider • 17 HD channels • Over 6,500 hours of HD output per month • An HD channel uses c. 15-20mbs of bandwidth • 422,000 customers • Fastest ever take-up of additional TV product (1) Source: Gfk research 13
  14. 14. Products: Accessibility of Content with Sky Anytime • More value for customers through core TV subscription • Sky Anytime on TV – Available in c.2m homes – 6th most watched channel in Anytime TV homes • Sky Anytime on PC – Broadest library of movies, entertainment and sports programming – Over 2m movie downloads to date – Over 1m sports and entertainment downloads 14
  15. 15. Accessibility of Content
  16. 16. Ross Kemp in Afghanistan Sunday 9pm 38% Anytime (TV) Sky+ Sundays 9pm ep 4% 12% Anytime (PC) Red button Directors cut 2% 5% repeats All showings 16% 2% repeats 21% Source: Sky View/TNS 16
  17. 17. Value: Leading Broadband Customer Growth Broadband Quarterly Net Additions (000) 350 300 250 200 150 100 50 0 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 18
  18. 18. Value: Challenging the Incumbents in Telephony Talk Net Quarterly Additions In 2007 (000) 236 171 153 132 52 14 -43 -46 -100 -165 -223 -264 Calendar quarters 1-4. 19
  19. 19. Demand 1.6m+ 1.2m+ 0.8m+ 0.6m+ Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2005 2006 2007 2008 DTH Sky+ Multiroom HD Broadband Telephony 21
  20. 20. Well Positioned to Grow • Differentiated network infrastructure • Customer growth and product penetration – Exceptional quality and range of content and products – Exceptional value and transparent pricing for customers – Superior customer experience – Trusted brand • Significant headroom for growth 22
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