It is reported that the ad sales of the Discovery network is worth an estimated £150m per year in advertising revenue for Sky’s sales house. Even with such significant income, Sky are continuously looking to drive better efficiencies by cutting the fees it pays broadcasters for selling their airtime. As a result of this move, Discovery are keen to open up discussions with other key broadcasters to see how they can leverage other players in the market and avoid receiving lower fees from Sky.
Discovery is responsible for the broadcast content across channels including Discovery, Discovery History, Discover Home and Health, Discovery Investigation, Discovery Science, Discovery Shed, Discovery Turbo, Quest Animal Planet, DMAX and TLC; all of which are currently delivering around 9% of Sky’s commercial impacts in 2016.
All Response Media Viewpoint
After the consolidation of Viacom and Channel 5 into Sky’s portfolio last year, it’s great to hear that a broadcaster is looking to flex its leverage across the other major sales houses. The Channel 5 move last year allowed Sky to reach a mass audience via a terrestrial portfolio, making it the largest player in the UK for the selling of commercial impacts, taking its share to 36%, an increase of 10%.
If Discovery were to move, Sky’s reign as the largest sales house would be short-lived with their share falling an estimated 30%. Both ITV and C4 would look to take advantage, with potential share increases to 39% and 31% respectively for them.
Although Sky does offer good value and a wider, more diverse portfolio of stations for our clients to deploy spend across, it’s never healthy for one player to have such a strong position in the market. Therefore it’s good that Sky, for once and probably only in the short term, may not be getting it all their own way. This is definitely one to watch: if Discovery does move it will be interesting to see Sky’s response, as it has been reported they are interested in the UKTV portfolio currently sold by C4. Although a 10 year tender is in place for C4 to continue selling this airtime… we shall see.