TELEVISION/FILM: Sky Group is bringing the European broadcast sector down to earth with an investment-strategy upgrade set to change the shape of the international TV-entertainment landscape in a post-Covid world.

As Europe’s biggest pay-TV operator, subscription and advertising-funded Sky owns some of the most-watched TV networks in the UK and Ireland, Germany (and neighbouring German-speaking Austria and Switzerland) plus Italy.

And a recent spate of investments in independent content-production firms  makes it clear the broadcaster and its new subsidiary Sky Studios want to become more than mere competitors to Netflix and linear free-to-air rivals like the BBC and ITV in Britain.

“We have an internal marketplace in Sky for the first time. It is about being the No. 1 supplier to Sky itself,” said Jane Millichip (pictured, below), Chief Commercial Officer at Sky Studios, during the recent Broadcast Press Guild (BPG) virtual press briefing via Zoom.

Jane Millichip

Sky Studios was launched last year after Sky Group’s £30bn acquisition by US-based NASDAQ-listed Comcast Corporation, owner of Hollywood studio NBCUniversal, in 2018.

Joined by Sky Studios’ CEO Gary Davey (pictured, below ), Millichip explained how Sky Studios will create shows to serve the 24 million subscribers who watch the Sky pay-TV channels and NOW TV, its streaming-TV service, in Europe.

Gary Davey

Additionally, it is positioning itself to produce and own top-tier programming to sell to the global TV market after previously focusing on acquiring and distributing third-party productions via its now defunct predecessor, Sky Vision.

The investments
In 2020 alone, Sky Studios has placed strategic funding in two new independent UK drama-production houses: The Lighthouse, which was launched late 2019, and Longboat Pictures, which was unveiled in May 2020. The move follows Sky’s acquisition of 24.9% of True to Nature, the acclaimed natural-history production outfit, in August 2019.

They join a portfolio of several other Sky-backed independent-production specialists, which include Love Productions (famous for the Great British Bake-Off format), factual producer Blast Films, entertainment formats maker Znak & Co, and US-based reality-crime producer Jupiter Entertainment.

Among the international hit dramas commissioned, acquired and/or co-produced by Sky in the UK and Europe are Emmy Award-nominated nuclear-disaster miniseries Chernobyl, the BAFTA Awards-winner Patrick Melrose with Benedict Cumberbatch, the highly acclaimed global crime-drama Gomorrah, and The New Pope, starring Jude Law.

Sky has declared ambitions to spend £1bn-plus on drama annually for the next five years.

As Millichip and Davey stated at the BPG briefing, the goal now is to create more original premium entertainment with a long shelf-life primarily aimed at existing Sky channels, like Sky Atlantic, but with international appeal as well.

A sign of things to come is The Third Day, a new six-part psychological thriller starring British Hollywood stars Naomie Harris and Jude Law (both pictured, below).

Jude Law

Naomie Harris

Co-produced with US production powerhouse HBO and UK “transformational theatre” company Punchdrunk, the cinema-standard miniseries will be the first original drama created in-house by Sky Studios and premieres in the UK on Sky Atlantic and NOW TV on 15 September.

An innovative touch to The Third Day will be seen in the additional standalone episode called Autumn, a theatrical film that is related to the miniseries’ storyline. It will feature the lead actors, takes place over a single day, is shot in one continuous take and can be viewed in real time live on the Sky Arts channel and online.

It will invite the audience to immerse themselves actively into the narrative (as opposed to the traditional passive viewing).

Funding original creativity
The Third Day’s maverick approach to entertaining a 21st-century audience nurtured on smartphones, social media and immersive reality explains Sky Group’s need to invest in some of the best production companies in Europe like True to Nature, The Lighthouse and Longboat.

As Millichip explained: “Longboat and Lighthouse have experienced drama executives whom we rate highly. They will develop for other entities, but we have a strong relationship with them. The strategic investment is not about revenue and EBIT (earnings before interests and taxes). We’re now set up to focus on Sky Studios’ needs for our channels in the UK, Italy and Germany.”

A similar commitment is being made to non-fiction programming that will be supplied to Sky’s new factual channels, including Sky Documentaries and Sky Nature. “We invested in True to Nature for our factual portfolio, which we’ve had for seven years,” she added.

The future
By 2024, Sky plans to have doubled its investment in original TV shows and entertainment. Sky Studios’ foundations will be buttressed by the £3bn being spent on made-in-Europe TV productions and movies at the new £230m Sky Studios Elstree currently being constructed just outside London. It is scheduled to open for business in 2022.

Davey said the multi-billion-pound investment in Sky Studios and the planned high-end production incubator at Elstree confirms parent company Comcast’s commitment to Europe.

“It is an example of the benefits of being part of Comcast. These are projects coming to the UK that could have gone to the US,” he told the BPG journalists.

Sky Studios Elstree will complement the new Innovation Hub based in Leeds, North England, which was launched last year to find and encourage “fresh, diverse talent to create new, original drama, comedy and scripted ideas for Sky and its customers. The Hub will also explore the interplay between innovative technology and storytelling to bring viewers new entertainment experiences”.

The Covid question
These ambitions are going ahead while taking on board the fact that the global economy is being held hostage by the current Coronavirus pandemic.

There have been setbacks. After three years, Sky has shut down its streaming-TV service in the overcrowded Spanish TV sector, where Netflix, Disney+, Amazon Prime Video and local players are shuffling aggressively for market share.

Currently, however, investment is exceeding divestment, including the expected losses due to the Covid crisis.

“From now on, all protocols are about learning to live with this. What we’re doing is not a short-term solution,” Millichip declared.

Sky Studios has restarted production in Europe. Projects include the first scripted drama, Ich Und Die Anderen, returning to set in Austria. In July, it announced filming would soon start on Sky Original entertainment shows There’s Something About Movies and BAFTA-winning A League of Their Own.

Meanwhile, Davey confirmed at the BPG briefing, confirmed that Sky Original Britannia 3 and A Discovery of Witches 2 would return to production over the coming weeks.

So, can the industry expect not only more investments in content owners but also outright acquisitions?

“We’re not on the hunt to buy companies at the moment. We’re not on an acquisition drive,” Millichip said. “But never say never.”

Chernobyl won the 2020 Broadcast Press Guild Awards for Best Drama Series