Bloomberg News

Sky Deutschland Adds Sports News Channel to Push Market Gain

October 20, 2011

(Adds News Corp.’s stake in sixth paragraph.)

Oct. 20 (Bloomberg) -- Sky Deutschland AG, the German pay- television operator part-owned by Rupert Murdoch’s News Corp., said it’s counting on a 24-hour sports-news channel to win viewers and gain brand recognition in German-speaking markets.

The channel, which has received about 48 million euros ($66 million) from a shareholder loan from New York-based News Corp., is scheduled to go on the air Dec. 1, the day before the draw for next year’s UEFA European soccer championship matches in Poland and Ukraine.

The sports outlet will have about 100 days to ease into operations before the German Bundesliga soccer final in the spring of 2012 followed by the UEFA event and the Olympic Games, Carsten Schmidt, Sky Deutschland’s chief officer of sports, advertising sales and Internet, said in an interview at the Medientage conference in Munich.

“By then we want to be positioned in Germany and Austria as one of the sources where people tune in to get the latest sports news,” Schmidt said. By the second half of the year, the success will be measured in viewing numbers, churn rates and advertising, he said. “All that will lead to a judgment as to how successful we are.” He declined to specify targets.

Sky, based in the Munich suburb of Unterfoehring, has struggled to become profitable amid a competitive free- television market in Germany. Chief Executive Officer Brian Sullivan has started premium services, expanded cable distribution deals, reached an access agreement for Microsoft Corp.’s Xbox game console and offered links for mobile devices since taking charge in April 2010.

Current Offerings

The German company is 49.9 percent owned by News Corp. Its current Sky-branded sports offerings include a channel each for Bundesliga games, other European soccer matches, other sport events worldwide and Austrian basketball and soccer. In addition, customers can subscribe to packages that include the multinational Eurosport network or a high-definition version of Walt Disney Co.’s ESPN from the U.S.

Sky Deutschland is hoping that the new sports-news channel’s website, by making “a lot” of video content available for free sampling, will entice users to upgrade to other Sky packages, Schmidt said in the interview yesterday.

Schmidt said he also wants to encourage public outlets, such as bars with TV screens, to show more of Sky’s programming, rather than limiting themselves to a few nights a week when Bundesliga or UEFA Champions League soccer games are broadcast.

“I hope that we will see in a couple of months that bars tune in all day,” Schmidt said.

“Currently we are mostly seen as a company offering pay television for live football and Hollywood movies without advertising interruption,” Schmidt said. “With this channel, we are adding relevance. This is something that helps the brand and our medium-term development, so the return on investment is not only seen by numbers.”

--With assistance from Cornelius Rahn in Frankfurt. Editors: Tom Lavell, David Risser

To contact the reporter on this story: Ragnhild Kjetland in Munich via rkjetland@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net


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