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indiantelevision.com Team
MUMBAI: UK pay TV service provider Sky is estimated to support a ?5.4 billion contribution to UK GDP in calendar 2011.
The impact made by Sky on the UK economy is revealed for the first time in an independent study conducted by the leading economic consultancy, Oxford Economics.
The report, The Economic Impact of Sky on the UK, finds that Sky makes a contribution to the economy in terms of GDP, jobs and taxes paid. It also shows how the company has stimulated economic activity in a wide range of associated companies and industries, through relationships with thousands of UK suppliers and business partners.
In 2011, Sky generated sales of ?6.4 billion and over 75 per cent of this revenue was retained in the UK.
Sky?s direct contribution to GDP of ?2.2 billion is equivalent to around 40 per cent of the contribution made by the entire TV and radio creative sector in the UK.
For every ?1 billion Sky contributes directly to GDP itself, it generates another ?1.4 billion in the rest of the economy through its purchase of goods and services and staff spending their wages.
In 2011 Sky used 4,000 suppliers across the UK, including 645 independent suppliers in sports production and 110 independent producers in entertainment and the arts.
"Sky?s footprint is UK wide and its contribution is felt in almost every part of the country," the report said.
At the end 2011, Sky employed 22,800 people in the UK, more than half as many as the entire pharmaceuticals industry. This included 9,400 people in London, 6,430 in Scotland, and 1,560 in Yorkshire and Humberside.
According to the report, 2,600 people are employed by Sky in producing and commissioning content. This is set to grow as Sky increases its investment in original British content to ?600 million by 2014. By the end of 2011, Sky had already increased its UK content spend to ?450 million a year.
In the last three years, Sky has hired 3,800 young people (16 to 24 years), including nearly 300 graduate trainees and apprentices.
Sky employs 800 engineers in software development and testing, representing 1 per cent of all people employed in the UK?s software development industry.
In total Sky is estimated to support 118,600 jobs in the UK through its procurement of goods and services and consumer spending out of the wage income of its staff. This includes 1.2 per cent of all employment in London and 0.6% of all jobs in Scotland.
The study also pointed out Sky?s contribution to tax revenues. These include:
- In the financial year 2010/2011, Sky directly contributed a total of ?941 million to the Exchequer.
- Of this, ?337 million came through corporation tax and business rates, with the balance collected on behalf of HM Treasury through employees? labour taxes and customers? VAT payments.
- In total, Sky is estimated to support a ?2.3 billion contribution to tax revenues, including Sky?s procurement of inputs and direct and indirect staff spending is included. This is equivalent to ?36 for every person in the UK.
Sky CEO Jeremy Darroch said, "We have grown rapidly since our business was established just over 20 years ago. Along the way we have taken risks, invested billions of pounds and been a driving force for innovation and change in our sector. As a result we have transformed UK consumers? experience of television and home communications, while generating significant returns for our shareholders and contributing positively to the UK economy as a whole.
"This report from Oxford Economics measures and explains the scale of our economic impact for the first time. We hope that Sky?s story provides a good example of the important contribution that a successful British company can make, particularly at a time when economic growth is harder to come by. As we look ahead, our appetite to invest remains strong and we hope to contribute even more in the future."
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