Sullivan: Sky Deutschland now on course for profitability

Sky Deutschland CEO Brian Sullivan

After four years of rebuilding the business, Sky Deutschland is set to turn a positive EBITDA this year and will grow rapidly in 2014, according to CEO Brian Sullivan.

“We’ve been going through recapitalising the business for four years and with the completion of that we’ve completed the restructuring of the business. We are finally going to turn the corner and, on a small scale, we will be profitable on an EBITDA basis this year. In 2014 that growth will increase rapidly,” said Sullivan, speaking on the opening panel at ANGA COM today.

Sullivan said Sky had a “straightforward” pay TV business model. Pay TV is not a “mandatory product” yet for consumers in Germany, so Sky had to differentiate by providing something different, he said.

Sullivan said the company had invested and sought to provide more value over the last four years, and that quality of coverage of sports and content from the likes of HBO meant that Sky could now provide “good value”.

He said that relative to competitors and pay TV peers, Sky Deutschland was still relatively small. “We are approaching the scale where we can have a profitable business…but we are still quite small,” said Sullivan. “We aspire to be in many more homes and hopefully we are doing the right things to achieve that.”

Sullivan said the Bundelsiga was “undoubtedly the most exciting product on the market” and this year, the involvement of German teams in the final of the Champions League had carried interest right through to the summer. He added that Sky would continue to invest in additional content for the platform.

“We are expecting to invest in more programming, content and even channels. We still believe in channels,” he said, claiming that Sky would “invest in places where we feel we can differentiate” rather than compete directly with free to air channels.

Sullivan said Sky’s audience was typically younger than the average for free-to-air channels, and that the average age of new customers had gone down over the last four years. Services including Sky Sports News and Sky Go have a stronger appeal to a youthful demographic, he said. This was beneficial, he said, because younger users were more likely to recommend services that they used than older viewers.