investor day 2015...fifa world cup u17&u20 world cup other major competitions | we can go deeper...

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INVESTOR DAY 2015

26 May 2015

DISCLAIMER

THIS PRESENTATION CONTAINS STATEMENTS THAT REVIEW

CURRENT BUSINESS OPERATIONS. MEDIA RELEASES AND

MANAGEMENT COMMENTARY, INCLUDING THOSE RELATING

TO THE 2015 HALF YEAR RESULTS ANNOUNCEMENT, ARE ALL

AVAILABLE ON SKY’S WEBSITE. PLEASE READ THIS

PRESENTATION IN THE WIDER CONTEXT OF MATERIAL

PREVIOUSLY PUBLISHED BY SKY.

CEO’S INTRODUCTION

JOHN FELLETCHIEF EXECUTIVE OFFICERFANATICAL ABOUT BASEBALL

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AGENDA

1. CEO’S INTRODUCTION

2. CUSTOMER PERSPECTIVE

3. STRATEGY AND PRODUCT ROADMAP

4. ENTERTAINMENT CONTENT

5. SPORT CONTENT

6. ADVERTISING SALES

7. GOVERNMENT RELATIONS

8. GEARING AND DIVIDENDS

9. Q & A

26 May 2015 4SKY Investor Day 2015

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THE IMPACT OF THE INTERNET

26 May 2015 SKY Investor Day 2015

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CONTENT MONETISATION ENGINE


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WE ARE QUICKLY REALISING IT’S TWO MARKETS FOR PAID CONTENT


Premium Pay TVStandalone OTT services

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NOW TV

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CONTENT COSTS


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PRICINGOUR RECENT PRICE INCREASE

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WATCHING BRIEF ON ALTERNATE PRICING MODELS

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•


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KEY DEVELOPMENTS AND INTENTIONS

• Extend partnership with Vodafone to offer broadband through SKY

• Exploring the option to provide NEON to customers with both SKY Movie & SoHo subscriptions, at no additional cost

• Plan to enhance FAN PASS to include SKY SPORT linear channels


CUSTOMER PERSPECTIVE

MICHAEL WATSONDIRECTOR OF MARKETINGFANATICAL ABOUT MAD MEN!

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WHAT THE VIEWER WANTS


UNDERSTANDING WHAT VIEWERS WANT

& WHY, IS UNDERSTANDING VALUE

UNDERSTANDING VALUE UNLOCKS

THE POTENTIAL TO PROFIT FROM CHANGE

|26 May 2015 SKY Investor Day 2015

HUMAN NEEDS

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DESIRES & EXPECTATIONS


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INFLUENCES


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OUTCOMES


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SO WHAT?


STRATEGY AND PRODUCTS

MATTHEW ORANGEDIRECTOR OF STRATEGY AND PRODUCTSFANATICAL ABOUT TRAIL RUNNING

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INVESTING ACROSS MULTIPLE HORIZONS


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CORE – PRODUCT PIPELINE


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o

o

o

o

o

o

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ADJACENT – PRODUCT PIPELINE


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ENTERTAINMENT

TRAVIS DUNBARDIRECTOR OF ENTERTAINMENT (NON-SPORTS CONTENT)FANATICAL ABOUT CONNOR MCGREGOR

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SKY HAS A BROAD ENTERTAINMENT MIX

OTTOWNED + OPERATED AFFILIATE


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PREMIUM AND EXCLUSIVE CONTENT SUPPLY IS AS CRUCIAL AS EVER!


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PREMIUM AND EXCLUSIVE CONTENT SUPPLY IS AS CRUCIAL AS EVER!

THE BIGGEST AND THE BEST


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CONSISTENT OUTPUT/MULTIPLE RIGHTS

A CONSISTENT PIPELINE OF THE BEST

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MULTIPLE RIGHTS OVER MANY PLATFORMS

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o


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CONSISTENT OUTPUT/MULTIPLE RIGHTS

MOST CONTENT COMES WITH MEANINGFUL

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LINEAR SUPPORTS OTT

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• Linear and OTT Programming teams integrated in 2015

GIVES US FUEL FOR OUR UNIQUE CONTENT AMORTISATION ENGINE26 May 2015 SKY Investor Day 2015

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THE MOVIE TIER EXPANSION

The Hunger Games. TM &© 2012 Lions Gate Entertainment Inc.

All Rights Reserved.

Frozen ©Disney. Available on SKY Movies Disney from July 2015.


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LINEAR TO VOD TO SVOD

2014

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o

o

o



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LINEAR TO VOD TO SVOD

2015

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BRINGING VOD TO OUR CUSTOMERS

LINEAR TO VOD

MYSKY UPGRADE ALLOWS CUSTOMERS GREATER CONTROL AND AN

EXPLOSION OF VIDEO ON DEMAND (VOD):

• Linear viewing options combine with:o PVR functionality

o Reverse EPG access

o Endless hours of VOD tied to their favourite SKY and Affiliate channels

o E.G.: 1,000’s of movies On-Demand broken into genres for ease of

access for SKY MOVIES subscribers

o Series Box Sets (e.g. Game of Thrones 1-5/The Wire 1-5 for SoHo

subscribers)

o Weekly catch-up of their favourite series on SKY Basic


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SVOD/OTT IN NZ: A RATIONALISED APPROACH

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SPORT

RICHARD LASTDIRECTOR OF SPORTFANATICAL ABOUT CHAMPIONS CHELSEA FC

|26 May 2015 SKY Investor Day 2015

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Copyright ©

PREMIUM CONTENT


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WE CONTINUE TO SECURE PREMIUM SPORT CONTENT


KEY PROPERTIES

SUPER RUGBY

RUGBY CHAMPIONSHIP

THE LIONS

ALL DOMESTIC CRICKET

UPCOMING TOUR BY AUSTRALIA

ALL RACES QUALIFYING

ANZ CHAMPIONSHIP

CONSTELLATION CUP

FIFA WORLD CUP

U17&U20 WORLD CUP

OTHER MAJOR COMPETITIONS

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WE CAN GO DEEPER OR COVER MORE LIVE SPORT WITH OUR POP-UP CHANNELS

DEEPER COVERAGE MORE LIVE COVERAGE


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MAKING LOCAL CONTENT MORE VIABLE


1ST XV RUGBY

FOOTBALL

BOXING

HOCKEY

BASEBALL

LOWER PURCHASE PRICE

FEWER STAFF PER EVENT

HORSES FOR COURSES

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MAJOR EVENTS


A CALL TO ACTION

CEMENT OUR POSITION AS PREMIUM CONTENT PROVIDER

CONTINUE TO PRODUCE WORLD CLASS SPORTING EVENTS

WE’RE IMPROVING THE ECONOMICS

ADVERTISING SALES

RAWINIA NEWTONDIRECTOR OF ADVERTISINGFANATICAL ABOUT SoHo

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34 ADVERTISING CHANNELS


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DIGITAL AND PRINT


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DOLLARS SPENT ON ADVERTISING IN 2014 INCREASED 4.2%


MIL

LIO

NS

Source: ASA

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ONLINE EXPENDITURE BREAKDOWN


MIL

LIO

NS

$613M

$311M

$139M

$128M

$12M

2014 SHARE

Source: ASA

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TELEVISION REVENUE DECLINED -3.9% IN 2014


14.7

8.93.9

1.8 1.9

-1.1

-12

6.5

1.8

-0.6

3.3

-3.9

% C

HA

NG

E Y

EA

R O

N Y

EA

R

CALENDAR YEAR

Jan-0

0

Jan-0

0

Jan-0

0

Jan-0

0

Jan-0

0

Jan-0

0

Ja

n-0

0

Jan-0

0

Jan-0

0

Jan-0

0

Jan-0

0

Feb-0

0

Feb-0

0

Feb-0

0

Feb-0

0

Feb-0

0

Feb-0

0

% C

HA

NG

E Y

EA

R O

N Y

EA

R

QUARTERLYRETURNED TO GROWTH IN Q1

2015

3%

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BIG TV SPORT EVENTS CONTINUE TO GROW TV REVENUES AND SHIFT SHARE


13.78

14.7113.84

16.48

11.51

8.3

11.27

4.7

2.8

10.11

4.89

-2.28

2.23

-6.94

10.4

1.36

-3.59

1.12

9.9

0.09

2.45

3.67

-2.15

-6.69

-10.43

-15.85

-17.86

-4.01

2.77

7.92

11.34

4.36

-0.82

4.85

1.72

1.34

3.41

1.36

-3.01-3.05 -2.99

6.24

7.96

3.332.22

-6.94

-4.4-4.85

3.02

% C

HA

NG

E Y

EA

R O

N Y

EA

R

Market 3.5%

SKY 23%

RUGBY WCNZ

OLYMPICSLONDON

COMMONWEALTHGAMES

OLYMPICSATHENS

OLYMPICSBEIJING

RWCAUSTRALIA

RWCFRANCE

COMMONWEALTHGAMES

LIONSTOUR NZ

CRICKET WCNZ

Market 3%

SKY 14%

COMMONWEALTHGAMES

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SPORT DRIVES ADVERTISING REVENUE


9% SHARE OF AUDIENCE IN SKY HOMES

37% SHARE REVENUE

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IN A DECLINING MARKET SKY HAS MAINTAINED REVENUE YOY

SKY Investor Day 2015

Source: PWC

-3.90%

2.50%

-3.90%

0.00%

-5.00%

-4.00%

-3.00%

-2.00%

-1.00%

0.00%

1.00%

2.00%

3.00%

% C

HA

NG

E Y

EA

R O

N Y

EA

R

PERCENTAGE REVENUE CHANGE YEAR ON YEAR

26 May 2015

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INCREASED SHARE OF REVENUEJANUARY TO MARCH

13.3%

11.9% 2014

2015


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CHANGING DELIVERY PLATFORMS


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NEW AUDIENCE MEASUREMENT METRICS


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TV REMAINS KING


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TV $40BDISPLAY $12B


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NO OTHER MEDIUM CAN COMPETE WHEN IT COMES TO DELIVERING REACH


3.6mNew Zealanders

watch TV every week

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3+ hours

per day

NO OTHER MEDIUM CAN COMPETE WHEN IT COMES TO DELIVERING REACH


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DIGITAL COMPANIES UNDERSTAND THE POWER OF TELEVISION


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MARKETERS ARE BECOMING INCREASINGLY FOCUSED ON BRAND SAFETY

SKY Investor Day 201526 May 2015

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“KRAFT FOODS RECENTLY REJECTED 75% TO 85% OF DIGITAL AD IMPRESSIONS DUE TO QUALITY CONCERNS”


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SUMMARY


FUTURE ADVERTISING MODELS AND MEASUREMENT

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SKY ADVERTISING STRATEGY

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GOVERNMENT RELATIONS

CHRIS MAJORDIRECTOR OF GOVERNMENT RELATIONSFANATICAL ABOUT SKY SPORT

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THREE KEY ITEMS FEATURE ON OUR REGULATORY RADAR

• Telecommunications Act review

• Regulation of online content

• Copyright Act review


GEARING AND DIVIDENDS

PETER MACOURTCHAIRMAN OF THE BOARDIRRATIONALLY OPTIMISTIC ABOUT THE WALLABIES

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GEARING AND DIVIDEND DECISIONS ARE DRIVEN BY SOME KEY FACTORS

• Optus satellite commitments of $30+m pa to 2023

• STB replacement program in excess of $100m over 18 months

• We capitalise STB and Install costs of approx. $50m in FY15, others Expense these costs

• TV station assets 9 years old, will require replacing ($40m+?)

• $200m Bonds mature in October 2016

• We will draw down debt in FY16 to maintain the current dividend pay out (70% of NPAT)

• Significant changes are afoot in the industry and an agile balance sheet is important

• Acquisition opportunities


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THANK YOU

26 May 2015

investor day 2015...fifa world cup u17&u20 world cup other major competitions | we can go deeper...

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