Ditching the dish: Sky Ireland chief on future of TV as Sky Glass goes on sale

At Sky’s Irish headquarters, the curtains in the demonstration room have been drawn and the volume on an “ocean blue” television selected by voice command. The company is preparing to unveil its latest weapon in the battle for “sticky” home entertainment customers: an ambitious foray into television hardware called Sky Glass.

The unbranded TV sets go on sale here on August 25th, with their launch backed by a marketing investment of close to €5 million — the largest campaign Sky has ever undertaken in the Irish market.

“It’s probably a first for us, not having Sky front and centre,” says JD Buckley, chief executive of Sky Ireland, of the absent set logo. “We wanted to create something that looked beautiful.”

Alongside the attention to living-room aesthetics — Sky worked with industrial designers Map Project Office on the sets — there are a few things about Sky Glass that are different.

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The European pay-TV, broadband and broadcasting company’s new project, which first launched in the UK in late 2021, eliminates the need for both a satellite dish and a set-top box, two things that have been intrinsic to Sky for decades.

“We think that will allow customers who haven’t been able to join Sky, because they either can’t have a dish where they live or they don’t want a dish, to come to us,” says Buckley (49).

It connects via wifi, with Sky recommending broadband speeds of 25-30 megabits per second

The 4K UHD Sky Glass, available in five colours and three screen sizes (43in, 55in and 65in) “comes with Sky inside”, while behind a woven acoustic mesh sits six in-built Dolby Atmos speakers, reducing potential soundbar and cable clutter.

It connects via wifi, with Sky recommending broadband speeds of 25-30 megabits per second (mbps) for its UHD service, though it says HD is capable of running over 10 mbps. Customers do not need to be with Sky for broadband, though Sky Glass requires a Sky Ultimate TV subscription (which includes free Netflix), effectively locking in customer loyalty.

At €755, €999 and €1,299 for the small, medium and large sets, the upfront costs for Sky Glass are not insignificant, which is why Sky is encouraging customers to pay a monthly add-on to their TV subscription instead. These prices, which work out slightly lower than paying outright, start at €15 a month over four years for the small set and rise to €52 a month over two years for the large set, with a €31 fee applying at the outset.

“It’s a premium product, but we believe it is very affordable,” says Buckley, noting that consumers have grown familiar with the idea of monthly payments for hardware from their experience with iPhones.

Sky Glass will be sold through Sky’s online and telesales channels and through four retail stores opened this year, with units in Dundrum and Blanchardstown in Dublin, Mahon Point in Cork and the Crescent in Limerick marking a step-up from the mid-mall pop-ups it previously operated.

While others have outsourced their customer touchpoints, Sky has “taken the opposite tack”, according to Buckley, with its sales advisers among the 950 people it directly employs in Ireland.

Sky Glass’s internet delivery, meanwhile, has obliged it to strike new carriage deals with broadcasters. A five-year deal just agreed with RTÉ brings the RTÉ Player app on to Sky Glass, extends catch-up from seven to 30 days and adds a programme restart option for customers “who happen to come in late for Dermot Bannon, or whatever it is”.

Sky, which has been owned since 2018 by US telecoms and media giant Comcast, has also signed deals with TG4 and rival Virgin Media Television, with Buckley hailing the importance of its relationships with each.

A welcome development is that BBC content can be officially accessed on-demand in the Irish market for the first time through Sky Glass.

“That again is a ground-breaking deal for us because the iPlayer hasn’t been available here,” says Buckley. This on-demand content will be “similar to iPlayer”, though “may not have all the bells and whistles”.

Its availability is even more important in light of one of the key features of Sky Glass, and one possible deterrent for upgraders and switchers: the inability to record. This has been replaced by a “playlist” function, to which users can add their favourites using a “plus” button on the Sky Glass remote.

But if a title is removed from on-demand, say after 30 days from RTÉ Player, it can no longer be viewed at a later date

All episodes of a particular title from the available apps — for example, the sixth season of Peaky Blinders from the BBC and all previous seasons from Netflix — will be gathered in one place, which Buckley says alleviates difficulties customers sometimes have in tracking down shows where rights are split.

But if a title is removed from on-demand, say after 30 days from RTÉ Player, it can no longer be viewed at a later date as it could be if recorded in advance to a Sky Q, Sky+ or any pay-TV box.

While Sky Glass was conceived in and for the age of on-demand, linear television channels remain “a massive part” of the viewing experience, accounting for an average of 90 per cent of all content watched on Sky platforms, says Buckley. “Obviously, live sport, those moments, are only moments once. Ireland beating the All Blacks, for example, you watch that once, you get the buzz from that once.”

Its advertisement marking the start of the Premier League soccer season “speaks to that”.

So he doesn’t agree with Netflix chief executive Reed Hastings’ assertion that linear TV will be dead in five to 10 years?

“All I can say is we know what’s happening today, and what we pride ourselves on at Sky is making sure we stay really close to our customers,” says Buckley. While that 90 per cent figure is “going to shift in the future”, he is confident that Sky will be ready for it.

“If you think back to when the streamers started to emerge, people thought ‘oh my god is this going to be the death of platforms like Sky’. We took a different take on it.”

Streaming service Now, one of Sky’s responses to the new competition, has garnered 250,000 users in the Irish market since 2017. Its other tactic, going deep on “the aggregation play” by forming “meaningful partnerships” with rivals, makes customer relationships “stickier” for all.

While Disney Plus and Prime Video are among the third-party apps to require a separate subscription, Peacock, the streamer owned by sister company NBCUniversal, is now free to Sky users, while the latest arrival, Paramount Plus, has been added to Sky Cinema. Some 28 per cent of Sky Cinema subscribers have already signed up.

Finding ways to “put more value back into the pack” is especially vital in light of the worsening cost-of-living crisis, he says. Have its customer churn rates increased?

“Thankfully we’ve had the lowest levels of churn ever over the last number of months and years,” says Buckley. There is no sign, yet, of a post-pandemic pick-up.

“For sure, though, the cost of living is an issue for customers and customers are going to be looking for value over the next period of time.”

Comcast’s swoop ended Sky’s links to Rupert Murdoch, who first invested in predecessor Satellite Television in 1983

The latest figures show revenues at Sky Ireland rose 3 per cent in 2021 to £526 million (€625.3 million). With Sky Mobile set to launch in mid-2023, its 225,000 broadband customers still about a third the size of its pay-TV base and plans for higher levels of Irish content, Buckley sees room for growth, helped by “the really nice case of FDI” that is Comcast’s investment.

Comcast’s swoop ended Sky’s links to Rupert Murdoch, who first invested in predecessor Satellite Television in 1983 and had long hoped to extend his 39 per cent Sky stake into full ownership. Is it helpful that this background noise went away when a new owner came in and bought 100 per cent?

“Absolutely, there’s perfect clarity there now, which is great,” says Buckley, who has led Sky Ireland since it had just 40 employees in 2012.

“Comcast think about things in 10-year timeframes, not in one or two-year timeframes. They’ve got a really long investment horizon, and you need that in this game, you need it in content, you need it in connectivity,” he says, hailing the Brian Roberts-led company as “super-supportive”.

“We’re always encouraged to act like owners, not renters.”