Cutting the cord: Sky are fostering their own downfall

Last week we discussed a Bloomberg article on the increasing availability of premium quality, pirated, broadcast content, made possible by set-top boxes.  In short, products are available to make any amount of premium sports or movie content available to users without subscription, with little the law can do about it.

Quite apart from pirate viewing, subscription broadcast numbers are under pressure from legal streaming services, such as Amazon Instant Video and Netflix, a drift known as Cutting the Cord.  A survey published this week reports that 8.2% of US broadcast subscribers ditched their service in 2014 in favour of streaming.  More significantly, 45.2% of US subscribers report they cut back on content they paid their broadcast supplier for.

UK satellite and cable TV subscribers pay some of the top prices in the world for sports and other premium content.  A dysfunctional market has emerged due to the controlling position of two players:

BSkyB, who dominate subscription TV supply in the UK
The FA Premier League, who own the key content for the UK market

Within this market there are winners and losers.  The winners are English and Welsh football clubs who earn enormous revenues from the FA Premier League TV deal, and subsequent trickle-down monies.  The losers are UK subscribers, who paid a fortune to keep the BskyB-FA Premier League contract in funds, and, of course, Scottish football clubs, who are excluded from the England and Wales league system.

Scotland is 8% of BskyB’s business, significant enough to make a dent in its revenues, but more importantly, if a US-style drift from expensive subscriptions is fostered in Scotland, it will move south soon enough.

I’ve been looking into this since we discussed it last week and will report back.

Shocked and stunned to read in the Daily Mail that Dave King met Sports Direct on the morning of his club’s EGM, as reported by Phil MacGiollaBhain a week ago.  That will explain the lack of denial, I suppose.  The interesting question is: Who gave the Daily Mail the story?  Dave King, or through his PR company?