Broadcaster struck early to secure wide-ranging two-pronged deal with HBO and head off threat from rival BT
BSkyB has signed a five-year deal for the exclusive rights to the entire HBO TV catalogue, which includes top American shows such as Girls and Game of Thrones, in a move that heads off a threat from arch-rival BT to enter the entertainment and film market.
BSkyB has struck early to extend its existing agreement out to 2020 in a deal worth as much as £275m over five years.
Deep-pocketed BT has so far spent billions of pounds snapping up prime TV sports rights, including Premier League and Champions League football as well as Premiership Rugby, with industry observers suggesting that BSkyB's stranglehold on film and entertainment rights could be the next flashpoint.
Rupert Murdoch's satellite TV company has moved quickly to secure a wide-ranging two-pronged deal with HBO, which revolutionised the TV market by investing in big budget dramas such as The Wire and The Sopranos. BSkyB airs the HBO catalogue on its heavily-promoted Sky Atlantic channel.
In addition BSkyB has also reached an exclusive agreement to co-fund and co-produce top-end dramas, of the scale of the multi-million pound per episode Game of Thrones, that could run to tens of millions of pounds investment in new shows per year.
The chief executive of BSkyB, Jeremy Darroch, said: "HBO is synonymous with must-see TV. Original production is the natural next step and we are enormously excited at the prospect of working together to realise our shared vision for epic drama of a truly spectacular scale."
The deal makes BSkyB the exclusive partner for HBO, which has previously co-produced popular dramas such as the BBC's Parade's End, with the rights to exclusively air the programmes developed in the UK market.
While Sky is perhaps best known for its multi-billion pound annual investment in football rights, it is also a significant investor in original British productions, such as the Daniel Radcliffe comedy A Young Doctor's Notebook and Stella, to the tune of £600m a year.
The scale of the deal, estimated at potentially £275m in total across five years, is less than the value of one-year of the £900m deal BT struck to snatch the Champions League TV rights from Sky.
BSkyB is expected on Thursday to report a drop in profits of as much as 8% for the six months to the end of December, as investment in new services and costs in its Premier League battle with BT takes its toll.
Investors will be closely watching the company's churn, the rate at which customers leave Sky, to see if BT's big money move into pay-TV is significantly damaging its customer base.
The HBO deal is part of a concerted effort by BSkyB to continue to build the quality of its non-sport programming, to create more "must have" pillars to keep a grip on, and grow, its 10 million-plus subscriber base.
BSkyB spends £2.5bn a year on programming, with the majority directed at the spiralling cost of football rights, with the Premier League expected to kick off the bidding war for the next three-year rights deal later this year.