Sky plans to double its budget for original content to stg£1bn

New studios are being built at Elstree, north of London, so the company has space to produce more of its own content in an increasingly crowded market

19th July, 2020
Sky plans to double its budget for original content to stg£1bn
Gangs of London has been Sky’s biggest original drama so far this year, getting about 15 million downloads in Britain and one million in Ireland

Sky is forging ahead with plans to double its annual budget for original content to £1 billion by 2024, with construction on a major new studio facility in Britain due to begin this month.

Planning permission has just been granted for the 32-acre TV and studio development in Elstree in Hertfordshire, north of London. It is expected to open in 2022, creating 1,500 jobs.

Zai Bennett, managing director of content for Sky UK and Ireland, said the investment would help the pay-TV company to compete in an increasingly heated production market.

“We want to make more of our own programming and be in control of the content we put in front of customers,” Bennett said. “To do that, we need studio space, because otherwise we're at the whim of other broadcasters booking up all of the available space out there.”

Plans for the new Sky Studios in Elstree, north of London

Bennett said streaming platforms such as Netflix and Amazon were driving demand for both studio space and creative talent in Britain and Europe.

“These platforms mean that there is really fierce competition now for good writers, directors and producers. They've got more places to go and more people willing to give them more money at a much earlier stage in the development process,” Bennett said.

“The way we try to combat that is to be involved in development from the very beginning - literally from a one-line idea or conversation - and to finance the process, which can take years. We’re putting more investment into original drama, comedy and entertainment, and branching into new genres.”

Sky has launched four new genre channels in the last six months: Sky Crime, Comedy, Documentaries and Nature.

“Sky is obviously a paid-TV platform. Customers give us money every month, and we've got to give them shows, films and content that is worth paying for,” Bennett said. “These channels are about doing as much as we can to make sure that we have something for everyone in the home.”

Bennett is responsible for all four new channels along with Sky One, Atlantic, Witness, Arts and Sky Cinema.

“We treat each one more like a mini brand than a linear channel, because we have thousands of hours of on-demand content behind all of them,” he said. “We launched Sky Nature with 400 hours of nature programmes available on demand. We had more than 150 types of documentaries on demand when we launched Sky Documentaries.”

Original drama

Chernobyl, a co-production between Sky and HBO, won ten Emmy awards

In addition to producing its own programming, Sky works with a number of partners. Earlier this month it announced its newest partnership with Sony Pictures Television (SPT), which will make films produced by the US studio available to Sky Cinema viewers.

“We have quite a few partnerships for different parts of the business. We have other Sky Cinema deals with Warner Brothers, Universal, Fox and Paramount,” Bennett said. “We also have deals with entertainment channels in the US like HBO and Showtime. We make original content with them as well. We co-produced Chernobyl with HBO and Gangs of London with AMC.”

Sky’s biggest original drama so far this year has been Gangs of London, which debuted on Sky Atlantic in April.

“Gangs of London got about 15 million downloads in Britain and one million in Ireland,” Bennett said.

The series was among the first batch of productions to come out of Sky Studios, the new production house established in June 2019 following Sky’s acquisition by Comcast.

With production capacity spanning Britain, Italy and Germany, Sky Studios is responsible for funding and producing original dramas, comedies and documentaries for its parent company. It is led by chief executive Gary Davey, who took up the role in June 2019, having previously been managing director of content for Sky.

“We wanted to really supercharge our production activities and centralise all of our original production budgets into a single entity,” Davey said.

“On the international stage, as you would expect, drama is always the superstar. It's the genre that gets the most attention and we've had a couple of quite big successes at Sky Studios in our first year. Chernobyl came out at the time of our launch and went on to win ten Emmies. Apart from Game of Thrones, it was far and away our biggest success in original content.

Gary Davey, chief executive of Sky Studios which had 29 shows in production when Covid-19 hit in March

“Since then, we’ve sold Gangs of London all over the world and we have a fantastic comedy called Brassic, which has done very well for us. We've committed to multiple seasons of both of those shows. They'll be around for a good while I think.”

Part of the appeal of the Sky Studios model was its pan-European scope, Davey said.

“We have a unified approach now, which has allowed us to produce successful series in Italy, like Devils and ZeroZeroZero, and Babylon Berlin and Das Boot in Germany,” he said.

“They are all franchises that will return for multiple seasons. We think about content engagement on a very broad scale across Europe and globally, but we are driven by the needs of local markets. We think a lot about the shows that are working in each of our territories. That is really what drives our creative priorities and development investment.”

When Covid-19 hit in March, Davey said Sky Studios had 29 shows in production. “We had to shut them all down. It was quite a scary time, because we didn’t know when we’d be able to start back up again,” he said.

“Right now, we've got nine productions back up and running. We spent quite a lot of time developing a sophisticated set of protocols. It's a 55-page document we're applying all over the world, so we're progressively getting back on track.”

In addition to facilitating Sky productions, Sky Studios Elstree will also be used to make films for Comcast-owned Universal Pictures, Focus Features and Working Title, and television series for Universal Studio Group.

How the new Sky Studios campus in Elstree will look

“The bulldozers have just arrived on the site in the last week. It will be a huge development, about the size as 17 football pitches. We wouldn't have been able to do this on our own. Becoming part of the Comcast family has been a huge help, because Universal Pictures had been investigating studio capacity for a long time,” Davey said.

“They were concerned about the future availability of quality sound stages, so they were ready to invest. If you combine the production requirements of Universal Pictures, NBCUniversal Media and Sky Studios, the demand is such that we are very confident we will keep the place very busy.”

Davey said Sky Studios had no immediate plans for Irish-led productions.

“We have not made any big investments in original production in Ireland, but I'm sure we will in the future,” he said. “We treat Ireland just like any of our other markets in the sense that if a great project comes out of Ireland, we will jump on it. We are open for business.”

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