But as the fight for control of the living room intensifies, and the cost of living crisis puts consumer budgets under pressure, the broadcaster is facing questions over its future growth.
When Sky first set up shop more than three decades ago, its satellite offering was revolutionary. But with the rise of streaming, the days of the dish are long gone and the media giant is increasingly being forced to respond.
While the launch of Sky Glass sounded the death knell for the satellite, its demise was all but confirmed with the launch of Sky Stream – a set-top box that can be connected to existing TV systems.
The moves reflect Sky’s efforts to establish itself as an aggregator, bringing together the farrago of different streaming services into one user-friendly platform.
The stance is not only aimed at exhausted consumers, it also offers streaming platforms an antidote to the dreaded phenomenon of churn – or losing customers.
François Godard, an analyst at Enders Analysis, says it’s a “compelling proposition” for the likes of Netflix and Disney.
EVP and CEO UK & Europe, Stephen Van Rooyen speaking in London at the official launch of Sky Glass - Matt Crossick/PA
However, while its user-friendly principle has won applause, the first generation Sky Glass television itself has been met with lukewarm consumer reviews. Paolo Pescatore, analyst at PP Foresight, says the product is “poorly executed”, adding that Sky must now simplify its confused offering of Glass, Stream, Q and NOW.
The company’s third-quarter sales plunged 14.7pc to $4.3bn, with the weak pound accounting for most of the decline. Meanwhile, deepening competition for eyeballs and consumer cutbacks due to the cost of living crisis mean the outlook has darkened.
Internally, Sky has been rocked by high levels of recent turnover after staff were paid out bonuses following Comcast’s takeover, as well as broader dissatisfaction about the culture under the new owner.
Stephen van Rooyen, the company's UK and Europe chief executive and architect of much of the growth and innovation that delivered the blockbuster sale price is the last of the senior old guard still at Sky. Even he is now speculated as a potential new boss of Vodafone.
Much of the growth in Sky’s customer base comes from its mobile and broadband offerings, but the telecoms industry is also facing a squeeze.
Media analyst Ian Whittaker says: “They are probably realising that we are not in a high subscriber growth market by any stretch of the imagination.”
It has also announced plans to double its annual production budget to £1bn. A spokesman said the company was “on track” to hit that target, with £500m of investment in the UK alone this year.
However, competition from deep-pocketed streaming rivals continues to grow, with Apple widely tipped to make a foray into UK sports rights. In a further blow, Sky’s exclusive deal with HBO runs out in 2025, at which point the US company is expected to wrap the content into its own streaming service.
There are also question marks over Sky News after boss John Ryley stepped down earlier this month. Commitments made by Comcast over the loss-making channel’s funding are due to run out in 2028.
In other markets, too, Sky has struggled to replicate the success it has enjoyed in the UK. The group is said to be close to a sale of its German unit, while its Italian business has been struggling following the loss of crucial Serie A football rights to streaming rival DAZN.
This leaves uncertainty over the group’s future direction, says François Godard at Enders. “That’s the most important issue now – how can they grow? They have proved that they are resilient and they are profitable, but where could growth come from?”
House of the Dragon - Ollie Upton/AP
Some of the challenges facing Sky are industry-wide, and the company will be hoping its value as an aggregator will increase over time as the media landscape begins to settle.
But the fundamental issue remains that without the satellite, Sky has lost its technological advantage, and its TV offering remains at the mercy of a launch from a rival such as Samsung.
Sky executives maintain that the company has long been in the process of diversifying and that it does not take a “dogmatic” approach to the technology it uses.
Sources pointed to SkyShowtime, a streaming joint venture between Comcast and ViacomCBS that brings NBC and Paramount content to viewers in 20 European markets. The company is also syndicating Glass with companies such as Foxtel in Australia, allowing it to reach customers in new markets.
Still, step changes in viewing habits leave the company largely reliant on the strength of its brand. Bosses are said to have claimed that they can sell anything, and the group is now putting that to the test.
The push into a new market highlights Sky’s efforts to squeeze more revenue out of its subscribers by targeting consumers in more areas of the home and combining various services into one bill.
BT’s mobile network EE has made similar moves, teaming up with Verisure and Norton to offer home and cyber security services.
Analyst Ian Whittaker describes this as the “Virgin strategy”, drawing a comparison with how Sir Richard Branson has leveraged the power of his brand.
He adds: “If you want to characterise what their strategy is moving forwards, it’s essentially going to be to maximise the revenues from their existing customer base.”
So as streaming subscriptions reach their peak, Sky will increasingly look to new areas. The company has already started to expand its offering to businesses through Sky Connect, and this could become a greater area of focus. Other new products harnessing the Sky brand are likely to follow the move into insurance.
Or it may opt for a more radical step, such as a move into the lucrative gaming market. Analysts say this is possible, although it would require significant investment and Sky would likely have to team up with a producer to make it viable.
Whatever approach the company chooses, however, one thing is clear. Much like its shiny Glass product, Sky will need to be about way more than TV.
