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INVESTOR DAY 2015
26 May 2015
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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.For
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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 Page 5
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CONTENT MONETISATION ENGINE
26 May 2015 SKY Investor Day 2015 Page 6
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WE ARE QUICKLY REALISING IT’S TWO MARKETS FOR PAID CONTENT
26 May 2015 SKY Investor Day 2015 Page 7
Premium Pay TVStandalone OTT services
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NOW TV
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26 May 2015 SKY Investor Day 2015 Page 8
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CONTENT COSTS
26 May 2015 SKY Investor Day 2015 Page 9
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PRICINGOUR RECENT PRICE INCREASE
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WATCHING BRIEF ON ALTERNATE PRICING MODELS
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26 May 2015 SKY Investor Day 2015 Page 10
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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
26 May 2015 SKY Investor Day 2015 Page 11
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CUSTOMER PERSPECTIVE
MICHAEL WATSONDIRECTOR OF MARKETINGFANATICAL ABOUT MAD MEN!
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WHAT THE VIEWER WANTS
26 May 2015 SKY Investor Day 2015 Page 13
UNDERSTANDING WHAT VIEWERS WANT
& WHY, IS UNDERSTANDING VALUE
UNDERSTANDING VALUE UNLOCKS
THE POTENTIAL TO PROFIT FROM CHANGE
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|26 May 2015 SKY Investor Day 2015 Page 14
HUMAN NEEDS
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DESIRES & EXPECTATIONS
26 May 2015 SKY Investor Day 2015 Page 15
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INFLUENCES
26 May 2015 SKY Investor Day 2015 Page 16
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OUTCOMES
26 May 2015 SKY Investor Day 2015 Page 17
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SO WHAT?
26 May 2015 SKY Investor Day 2015 Page 18
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STRATEGY AND PRODUCTS
MATTHEW ORANGEDIRECTOR OF STRATEGY AND PRODUCTSFANATICAL ABOUT TRAIL RUNNING
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INVESTING ACROSS MULTIPLE HORIZONS
26 May 2015 SKY Investor Day 2015
Page 20
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CORE – PRODUCT PIPELINE
26 May 2015 SKY Investor Day 2015
Page 21
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ADJACENT – PRODUCT PIPELINE
26 May 2015 SKY Investor Day 2015
Page 22
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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
26 May 2015 SKY Investor Day 2015 Page 24
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PREMIUM AND EXCLUSIVE CONTENT SUPPLY IS AS CRUCIAL AS EVER!
26 May 2015 SKY Investor Day 2015 Page 25
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PREMIUM AND EXCLUSIVE CONTENT SUPPLY IS AS CRUCIAL AS EVER!
THE BIGGEST AND THE BEST
26 May 2015 SKY Investor Day 2015 Page 26
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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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26 May 2015 SKY Investor Day 2015 Page 27
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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 Page 28
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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.
26 May 2015 SKY Investor Day 2015 Page 29
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LINEAR TO VOD TO SVOD
2014
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THE MOVIE TIER EXPANSION
26 May 2015 SKY Investor Day 2015 Page 30
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THE MOVIE TIER EXPANSION
LINEAR TO VOD TO SVOD
2015
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26 May 2015 SKY Investor Day 2015 Page 31
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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
26 May 2015 SKY Investor Day 2015 Page 32
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SVOD/OTT IN NZ: A RATIONALISED APPROACH
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26 May 2015 SKY Investor Day 2015 Page 33
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SPORT
RICHARD LASTDIRECTOR OF SPORTFANATICAL ABOUT CHAMPIONS CHELSEA FC
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|26 May 2015 SKY Investor Day 2015 Page 35
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Copyright ©
PREMIUM CONTENT
26 May 2015 SKY Investor Day 2015 Page 36
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WE CONTINUE TO SECURE PREMIUM SPORT CONTENT
26 May 2015 SKY Investor Day 2015 Page 37
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
26 May 2015 SKY Investor Day 2015 Page 38
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MAKING LOCAL CONTENT MORE VIABLE
26 May 2015 SKY Investor Day 2015 Page 39
1ST XV RUGBY
FOOTBALL
BOXING
HOCKEY
BASEBALL
LOWER PURCHASE PRICE
FEWER STAFF PER EVENT
HORSES FOR COURSES
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MAJOR EVENTS
26 May 2015 SKY Investor Day 2015 Page 40
A CALL TO ACTION
CEMENT OUR POSITION AS PREMIUM CONTENT PROVIDER
CONTINUE TO PRODUCE WORLD CLASS SPORTING EVENTS
WE’RE IMPROVING THE ECONOMICS
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ADVERTISING SALES
RAWINIA NEWTONDIRECTOR OF ADVERTISINGFANATICAL ABOUT SoHo
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34 ADVERTISING CHANNELS
26 May 2015 SKY Investor Day 2015 Page 42
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DIGITAL AND PRINT
26 May 2015 SKY Investor Day 2015 Page 43
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DOLLARS SPENT ON ADVERTISING IN 2014 INCREASED 4.2%
26 May 2015 SKY Investor Day 2015 Page 44
MIL
LIO
NS
Source: ASA
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ONLINE EXPENDITURE BREAKDOWN
26 May 2015 SKY Investor Day 2015 Page 45
MIL
LIO
NS
$613M
$311M
$139M
$128M
$12M
2014 SHARE
Source: ASA
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TELEVISION REVENUE DECLINED -3.9% IN 2014
26 May 2015 SKY Investor Day 2015 Page 46
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
26 May 2015 SKY Investor Day 2015 Page 47
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
26 May 2015 SKY Investor Day 2015 Page 48
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 Page 49
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INCREASED SHARE OF REVENUEJANUARY TO MARCH
13.3%
11.9% 2014
2015
26 May 2015 SKY Investor Day 2015 Page 50
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| Copyright ©26 May 2015 SKY Investor Day 2015 Page 51
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CHANGING DELIVERY PLATFORMS
26 May 2015 SKY Investor Day 2015 Page 52
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NEW AUDIENCE MEASUREMENT METRICS
26 May 2015 SKY Investor Day 2015 Page 53
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TV REMAINS KING
26 May 2015 SKY Investor Day 2015 Page 54
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TV $40BDISPLAY $12B
26 May 2015 SKY Investor Day 2015 Page 55
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NO OTHER MEDIUM CAN COMPETE WHEN IT COMES TO DELIVERING REACH
26 May 2015 SKY Investor Day 2015 Page 56
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
26 May 2015 SKY Investor Day 2015 Page 57
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DIGITAL COMPANIES UNDERSTAND THE POWER OF TELEVISION
26 May 2015 SKY Investor Day 2015 Page 58
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MARKETERS ARE BECOMING INCREASINGLY FOCUSED ON BRAND SAFETY
SKY Investor Day 201526 May 2015 Page 59
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“KRAFT FOODS RECENTLY REJECTED 75% TO 85% OF DIGITAL AD IMPRESSIONS DUE TO QUALITY CONCERNS”
26 May 2015 SKY Investor Day 2015 Page 60
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SUMMARY
26 May 2015 SKY Investor Day 2015 Page 61
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
26 May 2015 SKY Investor Day 2015 Page 63
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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
26 May 2015 SKY Investor Day 2015 Page 65
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Q & A
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THANK YOU
26 May 2015
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