Creating consumer demand for sky tv through sports

Sky 3 Image 1

Successful marketing involves providing consumers with the goods and services they require, where they want them and when they want them. In this country, millions of people enjoy participating in and watching a range of sporting activities. There is great competition for tickets to major sporting events, such as a centre court match at Wimbledon, a Five Nations rugby international or a key Premier Division football clash. This also means that tickets for such events are very expensive. For example, watching one day of a Test Match between England and Australia may cost £25 or more. However, for most sports fans there is no substitute for ‘live’ sport. Long after a game is finished, the fan can give his or her account of the action – ‘I know because I was there.’ The next best alternative to ‘being there’ is to watch ‘live’ sport in your own home. The where therefore is in your own living room and the when is the moment the match is taking place.

This case study focuses on how one market conscious organisation, BSkyB Ltd, provides over 300 hours of sport per week for millions of sports enthusiasts in this country. For many people, subscribing to Sky Sports, is their primary reason for buying into Sky TV.

Background to Sky TV

When any new product is launched, it is essential to achieve a ‘critical mass’ of sales. Up to this point, the success or failure of the new idea is in the balance. However, once the product has achieved this ‘critical mass’ consumer purchasing of the product will accelerate. For example, a number of records have to be re-released before making it into the Top 40. Once in the Top 40, sales will increase more rapidly because of increased radio airplay.

Sky TV provides an excellent example of a product which reached critical mass in a very short period of time. However, as with any other successful product, the early days involved a considerable amount of risk. There was no guarantee that the product would, in fact, reach critical mass. The story of BSkyB Ltd began in February 1989 with the launch of Sky TV - a four channel service including Eurosport.

  • March 1990, Sky TV reached one million UK homes.
  • November 1990, Sky TV merged with BSB to form British Sky Broadcasting.
  • March 1992, BSkyB Ltd achieved operational break-even.
  • July 1992, BSkyB Ltd secured the right to live and exclusive Premier League football matches.
  • March 1996, Sky TV reached five million UK homes.
  • March 1996 Sky TV broadcasted UK television’s first ever ‘Pay Per View’ event - Tyson -v- Bruno.
  • August 1996, satellite channel viewing exceeded 10% of all TV viewing in the UK.
  • February 1997, Sky reached six million UK homes.

Multi channel growth in the UK

When choosing Sky TV, consumers subscribe to a multi-channel package which enables them to watch a range of general entertainment and specialist channels. Today, Sky TV offers more than 40 channels to viewers. Multichannel subscription has expanded at a rapid rate - in December 1989, only 3.3% of television owners in the UK subscribed to multi-channel TV. By December 1996, almost six million households, approximately 15 million individuals, watched Sky TV. By April 1997, 25% of television homes had subscribed to Sky.

Financial implications

Given the right pricing strategy, any organisation that reaches a critical mass of sales should then see this success translate into growing profits. This has clearly been the case for BSkyB. The following figures show that, in financial terms, BSkyB achieved its critical mass at the end of 1992. BSkyB’s growth rate clearly indicates that it is in tune with consumer demand. It is dynamic and entrepreneurial, seeking to anticipate and meet consumer demand for a varied and exciting entertainment mix, delivered directly to consumers’ homes.

It is important for business organisations to identify their buying publics or ‘target markets.’ Research carried out in 1997 revealed that over 35% of adults between 16 and 34 subscribe to Sky TV and nearly 40% of males in this age range. Independent research carried out by BARB, (the industry research body used by all broadcasters), projects that these figures will continue to rise over the next few years, so that by the year 2001:

  • 50% of all individual television watchers will be Sky TV subscribers.
  • 67% of men in the 16-34 year old age group will be Sky TV subscribers.

Research also indicates that satellite television is also particularly popular for young families with children – an attractive market for many advertisers.

In addition to private subscriptions, the out-of-home viewing subscriptions are very important to BSkyB Ltd and its advertisers. Many people without private subscriptions watch Sky TV in the 44,000 pubs and clubs that subscribe to Sky Sports. Over 2.5 million people watched England play Italy in the World Cup qualifier in February 1997 on Sky in pubs, clubs, hotels, etc.

Marketing obectives

BSkyB Ltd has three main marketing objectives. These are to:

  1. Drive new subscriptions – targeting the ‘undished’ i.e. gain as many new subscribers as possible.
  2. Manage the existing subscriber base. This involves maintaining the loyalty of existing customers by: a. reducing the churn rate i.e. the number of people cancelling ongoing subscriptions. b. maximising the number of upgrades i.e. the purchase of more channels by existing subscribers e.g. encouraging people to upgrade from the basic package to sports or movies. c. adding value for subscribers by giving them a better service (e.g. by offering them a high quality Sky TV guide).
  3. Develop the Sky brand i.e. building a positive brand image in consumers’ minds.

Sky’s brand values

BSkyB’s offer to consumers is quite different from those of terrestrial broadcasters such as the BBC and ITV. BSkyB Ltd gives consumers the chance to create their own entertainment menu because of the wider choice of channels and programmes available from the same broadcaster.

The Sky TV brand:

  • offers viewers a new category of television - the freedom to choose what they want and when they want to watch it - sports, movies, news, children’s programmes.
  • provides exclusive events, new channels, new initiatives, (e.g. Pay Per View/Interactive TV).
  • is positioned as exclusive, dynamic and innovative.
  • has developed a strong and consistent image via a confident, bold and upbeat tone of voice.

Sports marketing strategy

Sky 3 Image 1

Described by Rupert Murdoch as the ‘battering ram’ of Pay TV, Sky Sports is, in many ways, the ‘jewel in the crown’ of Sky’s activities. It is easy to see why this is the case. For example, a large number of rugby fans became Sky TV subscribers when the British Lions rugby team toured South Africa in the summer of 1997. Sky TV has thus become a ‘must have’ for UK fans of mainstream sports (the acquisition of the Premier League football rights is the best example of this).

A key part of Sky’s strategy is to communicate its ongoing commitment to each fan’s favourite sport. Sky’s sports marketing strategy has been built around the purchase of exclusive rights to events which the consumer is willing to pay for. Sky has signed up a series of sports deals - such as the rights to the complete season of the Super League, the Premier League and the Coca-Cola cup. These are ongoing events rather than annual one-offs - such as the Grand National or the Boat Race. Acquiring exclusive rights to television Premier League matches is very costly and Sky Sports has to bid against rival television channels. Televised sport is never cheap. Broadcast fees are high so that teams can plough money back into developing the sport.

Sky TV's sports strategy is to demonstrate and showcase its premium products to help achieve objectives within all areas of the company e.g. consumer marketing to help gain new subscribers and subscriber marketing to reduce the churn rate.

Past, present and future

When creating its promotional message, BSkyB can draw upon:
The Past - Most major sporting successes have been screened on Sky TV over the past five years e.g. Tyson versus Holyfield (boxing), Brian Lara’s world record cricket score and Manchester United’s Premier League championships.
The Present – Sky’s current sports programming proposition is exceptional. Think of a major outstanding current sporting occasion - the chances are it will be appearing on Sky TV.
The Future - Sky subscribers can look forward to many great live and exclusive events e.g. Sky TV has the broadcast rights to the FA Carling Premiership until the year 2001.

BSkyB’s commitment to sport in Britain is unrivalled. BSkyB’s policy is to complement top quality action with the best broadcasting techniques and expert presenters. It sets the standards by which all sport on television is judged. Certainly, the influence of technology like super-slow-motion cameras, new camera angles and detailed statistical analysis has revolutionised the way that sport is broadcast on TV. The luxury of a three-channel sports network allows Sky to involve viewers in techniques, tactics and issues behind the action as well as match coverage.

Key sporting events

Sky’s major sporting contracts include:

Football - to the end of 2000-01

  • Exclusive live coverage of the FA Carling Premiership (60 games per season).
  • Live coverage of the FA Cup from Round One to the Semi-Final (at least one tie and one replay from each round).
  • Exclusive live coverage of England internationals at home.


  • Exclusive live coverage of the Ryder Cup in 1997 and 1999.
  • Exclusive live coverage of all four days of the US Open 1996-1999.

Rugby League

  • Exclusive live coverage of the European Super League.

Rugby Union

  • All England internationals played at Twickenham, live until the end of 2001-2.
  • All England tour matches in New Zealand, Australia and South Africa live until the end of 2006.

Marketing and sales

Sky’s sports acquisitions provide tremendous opportunity to build the Sky brand and drive new subscriptions for Sky TV. The marketing and advertising campaigns capitalise on the strength of these events, using imagery and personalities through a range of media - including posters, press advertising, radio, cinema and television.

The marketing campaign that marks the launch of the 1997/98 football season was a good example of how Sky uses sports to drive new subscriptions. The campaign was aimed at football fans (over 14 million in the UK according to TGI research) and demonstrated how Sky understands football as well as the fans. The multi-media campaign across posters, press, radio and cinema was highly integrated to ensure consistency and impact.

Pay Per View is currently the most hotly debated and controversial subject in UK television. It is the system whereby existing subscribers pay an additional charge, over and above their normal monthly subscription, to watch a specific event. To date, Sky TV has only shown boxing matches on a Pay Per View basis (now the promoters, Don King and Frank Warren, will not sell the broadcast rights on any other basis). The Pay Per View system is well developed in the United States and covers films as well as sporting events. The first PPV event in this country was the Tyson v Bruno boxing match in March 1996. The event cost £9.95 for subscribers booking before Friday night and £14.95 afterwards. It was extremely successful as over 650,000 Sky subscribers bought into this fight which was broadcast in the early hours of Sunday morning.


The introduction of digital technology presents a major opportunity for BSkyB Ltd. Digital broadcasting offers greatly increased channel capacity and the ability to make better use of newer features such as Pay Per View, near video on demand and interactive services such as home shopping. BSkyB Ltd will be the first to introduce digital broadcasting services in the UK. Its launch is planned for Spring 1998. BSkyB Ltd will initially introduce around 200 new digital channels. Additionally, the company is working with a number of interactive service providers. There is no doubt that digital television provides the way forward for television.