Sky strikes production deal with HBO as growth rolls on over third quarter | Major Businesses | Business
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As Q3 results reveal that the pay-TV cash-generating juggernaut just keeps on rolling across Europe, Sky has joined forces with HBO to oversee a development slate of what the firms call world class drama series.

skyresults 20April2017For the nine months ended 31 March 2017, the Sky Group posted revenues of £9.6 billion, up 11% annually on a reported basis and up 5% at constant currency. In the UK and Ireland, revenues were £6.41 billion up 4% on both measures while Italy grew 25%/7% to £1.849 billion and German and Austrian business was up 28%/10% to £1.382 billion. These drove Group EBITDA to £1.5 billion and adjusted group operating profit of £1 billion.

The Group’s total costs grew by 8% to £8.628 billion, ahead of revenue growth as Sky absorbed significantly higher programming costs resulting from the £494 million year to date step-up in the new three-year Premier League contract.

In the UK and Ireland, Sky claimed a ‘solid’ quarter, growing customers, products and revenues, despite what it called the more challenging environment facing most consumer businesses during the first quarter of the new calendar year. As at 31 March, Sky had 12.7 million customers and it added 40,000 new customers in the quarter ended 31 March 2017 and reported customer growth of 338,000 over the last year.

“It's been another strong quarter for Sky, despite this being our seasonally quietest period,” said CEO Jeremy Darroch. “We continue to perform well, attracting another 106,000 customers across the Group in the quarter, taking growth to 769,000 over the last 12 months. We have delivered strong revenue growth of 11% and are on track financially with operating profit for the nine months exceeding £1 billion.”

The Q3 results also revealed that its next-generation Sky Q service is now in over a million customer homes and other quarterly highlights included major long term rights renewals secured with UKTV, Discovery, A+E Networks and NBCUniversal. Yet the major content news was the deal with HBO

The companies say that the arrangement will focus on high-end productions that feature engaging stories with international points of view and casting. A panel of executives from both organisations will be responsible for green lighting projects and the partnership will be open to pitches from across the creative community, in both the US and Europe. Sky and HBO add that they are looking for ideas consistent with the content strategies of the respective brands in North America and in Europe. They claim that the new partnership represents an unrivalled opportunity for production companies to have their content broadcast by two of the leading brands in worldwide television. The first projects of the partnership have been initiated in development, with announcements expected in the coming weeks.

Commenting on the deal, HBO chairman and CEO Richard Plepler said: “Sky has been a great partner for us and this deal allows even deeper collaboration between our two great companies, which have a long tradition in creating superior content for our customers. Together we represent the best in television and combined we will raise the bar even higher in pay TV programming.”

Darroch added: “HBO and Sky have for many years shared a common creative culture and a common vision for the development of high quality drama. This new venture deepens that relationship, maintains our leadership position in world-class content, provides great opportunities for indies and gives our customers even more opportunity to enjoy brilliant story telling.”