Media Forum: Is Sky One BSkyB's weakness?

million by the end of 2005 - with days to spare.

Emboldened by this achievement, it promptly turned on the rival digital
platform Freeview, saying it (Freeview, that is) was not fit to lead
Britain into the digital TV future, describing it as "an analogue
platform with not very convincing go-faster stripes" and accusing the
BBC of abusing its public service duties when it favoured Freeview in
its digital promotions.

It still had time later in the day to complete its £211 million
takeover of easynet and create a new division, Sky Broadband, to house
this and other web-based assets.

It was not finished yet, not by a long chalk. As the New Year dawned and
with holiday overindulgence already a fading memory, it swung into
action yet again with what may prove to be the most significant
announcement of the lot - the appointment of Richard Woolfe as the head
of Sky One.

This job has traditionally been the Bermuda Triangle of TV programming
jobs; Sky One's performance has been at best patchy (it has been losing
share for at least two years) and it has never found a distinctive
positioning.

Woolfe, a veteran producer, may become a key figure as Sky contemplates
its next target - ten million subscribers by 2010. Sky surely needs a
broad-appeal, general entertainment flagship channel more than ever.

Andrew Constable, the head of media at Coors Brewers, likes the
male-oriented demographic the platform traditionally offers but he
agrees it would be great if Sky could make progress in other areas. But,
he adds, don't ever bet against the company when it comes to business
goals. He states: "In the past, every time BSkyB has come out with a
target, there have been people who have said it will struggle to make it
- but it has always achieved that target. So, until I see any evidence
to the contrary, I have got to believe it will be close to the ten
million figure it wants to achieve by 2010. It knows the market better
than anyone."

Chris Hayward, the head of broadcast at ZenithOptimedia, tends to
agree.

He comments: "It's a smart company, aware of its strengths, and it has
the means to make things happen. But it's also true that the game has
moved on in recent years. Previously, its dominance of multichannel was
unquestioned but Freeview in particular has been much more of a
challenge that anticipated. And because of its business model (its focus
on subscription revenues), there perhaps hasn't been as much of a focus
on the likes of Sky One as there might have been. Sky is not unaware of
that. And, in truth, its programming hasn't been bad. But it needs to be
marketed and scheduled and it needs to become a broader entertainment
channel. It has to provide a stronger female appeal to balance Sky's
sports output."

But Andy Jones, the joint chief executive of Universal McCann London,
doesn't buy that argument at all. He explains: "As I see it, the
subscription target and the performance of Sky One are two entirely
different issues. BSkyB's proposition is that it offers a far broader
range of channels than Freeview. And if Freeview starts to rival BSkyB,
then it would just put Sky One on to the Freeview platform.

I really don't think it's a central issue. And we know the Sky platform
will look very different in three or four years' time - for instance, it
has just announced a tie-up with Microsoft (to develop a broadband
video-on-demand service) that could have radical implications. For me,
all of that puts the Sky One question into perspective."

Neil Johnston, the head of TV buying at OMD UK, agrees Sky could face
more serious competition in the coming years but he doesn't think Sky
One need be a problem - if it needs fixing, and it probably does, then
it will be fixed. He concludes: "I believe Sky will have to do more with
Sky One. It still does not have the feel of a flagship channel and while
that remains the case, people will still think of BSkyB in terms of a
delivery system. The two million people Sky needs to achieve its next
target are not interested in sport - they are interested in high-quality
traditional entertainment and reality TV. Sky One doesn't really excel
at that."

MAYBE - Andrew Constable, head of media, Coors Brewers

"I don't think the full picture has emerged but if Sky loses (Premier
League) exclusivity, it will find it harder to meet its next target. The
environment is good for us but we'd be even happier if Sky One
improved."

YES - Chris Hayward, head of broadcast, ZenithOptimedia

"The advertising community believes Sky One should be a lead channel in
the multichannel environment. So it continues to give cause for concern
and we would like to see a big improvement, not just a halt in its
decline."

NO - Andy Jones, joint chief executive, Universal McCann

"The two biggest drivers of dish sales are technological -
high-definition TV and Sky+. Sky+ is a phenomenally good product; there
will be two million HDTV sets in UK homes by the end of 2006. Sky One is
one channel among hundreds."

MAYBE - Neil Johnston, head of TV buying, OMD UK

"You could argue that Sky One needs to produce more great programmes and
memorable TV. But BSkyB is cash-rich. It has bigger programme and
marketing budgets than anyone. If it wanted to, it could buy the next
two million homes."

- Got a view? E-mail us at campaign@haynet.com.