Sky TV - is this the death spiral?

[Arbroath]

Interested in people's thoughts on Sky TV....circa 10 times earnings but a very challenging future. Do people see value at these levels or a potential death trap?

[brend]

Interested in people's thoughts on Sky TV....circa 10 times earnings but a very challenging future. Do people see value at these levels or a potential death trap?

Very dim future - and will never hold.

They are slowly losing content with sky sports (EPL/Golf) and they couldn't get coverage for the blackcaps in South Africa. I think most viewers will be cancelling their subs after the worldcup. It is quite expensive (Basic/Sky Sports/mysky) around $100 per month??

You can watch sport by other means (geo-unblocking). You can watch all the NRL for free and pay $11/per month to watch super rugby/rugby championship.

[JayRiggs]

In the middle of a downwards cycle.
They are losing subscribers, so Sky need to hike up subscription fees to cover the loss of subscribers and maintain net profit growth.
The more subscription fees go up, the more subscribers they lose and so on.
It's been quite impressive how Sky have managed to increase net profits the past couple of years, but at some stage, the loss of subscribers will be too much and simply hiking up subscription fees won't cover it up anymore.

Nice positive spin in their full year report:

"The 2015 financial year has produced our strongest financial result to date. Revenue is at
an all time high at $928 million, up 2% on the previous period and net profit after tax saw
an impressive increase of 6% to reach $172 million."
but clearly the market see's through this.

Fisher Funds hold some SkyTV. I expect they would have sold out by now.

[Beagle]

Sunset industry, this is a classic "value trap" in my opinion.

[twotic]

Very dim future - and will never hold.

They are slowly losing content with sky sports (EPL/Golf) and they couldn't get coverage for the blackcaps in South Africa. I think most viewers will be cancelling their subs after the worldcup. It is quite expensive (Basic/Sky Sports/mysky) around $100 per month??

You can watch sport by other means (geo-unblocking). You can watch all the NRL for free and pay $11/per month to watch super rugby/rugby championship.

How do you watch the NRL for free? Cheers.

[twotic]

The other thing I would add is that whilst their sky product is pretty crap (if you are paying for it) I wonder if it is detrimental to their subscriber numbers? I know a bunch of people who use their friends/families skygo as their primary means of watching sport so they don't have to subscribe themselves....

[James108]

Ask yourself if you think Sky will be around in 10-20 years, you would probably need at least 20 years of them paying a 9% div to get good value (haven't done the sums).

Making a call that SKT will be around in 20 years i.e. not go the way of video stores is pretty tough, they may pivot and retain some of their success but how could you know.

[Jay]

Anyone know how the equivalent of Sky in the UK and US are getting on and how many that subscribe to sky have a smart TV and/or able stream content to it
with an acceptable viewing quality- not as many as you may think maybe :confused:

Probably time to upgrade the TV soon - maybe wait until Fibre comes our way - another year or two away, I understand, even though I'm pretty sure fibre goes to one of Chorus's/Spark's
green boxes about 200-300 metres away around the corner and I live in suburb about 15Km from the CBD of Auckland.


But agree, cannot be any significant growth unless they can get into the streaming service to replace the current satellite service
Disc - Current Sky subscriber - previous holder

[stoploss]

We recently got netflix and I love it . Will probably ditch Sky sport if not the whole lot after the World Cup ....Have spoken to a few friends about this recently and it seemed like a common theme .......

[twotic]

Anyone know how the equivalent of Sky in the UK and US are getting on and how many that subscribe to sky have a smart TV and/or able stream content to it
with an acceptable viewing quality- not as many as you may think maybe :confused:

Probably time to upgrade the TV soon - maybe wait until Fibre comes our way - another year or two away, I understand, even though I'm pretty sure fibre goes to one of Chorus's/Spark's
green boxes about 200-300 metres away around the corner and I live in suburb about 15Km from the CBD of Auckland.


But agree, cannot be any significant growth unless they can get into the streaming service to replace the current satellite service
Disc - Current Sky subscriber - previous holder

I've just been chatting with my brother in law. He's a big sports fan based in the US. Sports viewing is extremely complicated over there because in sports like NFL individual teams own the rights to sell their games. He was saying it is very messy over there and lots of people are pissed off, but it does still mean certain big networks/providers can still flog off packages of crap that no-one wants because they have sole rights to something (for example New England Patriots games) that everyone wants.

On the other hand he said a lot of premium channels (like HBO) are selling direct to customers now, so customers can bypass the big networks and their packages if they like so as to get the one or two channels they want.

Made me think, so long as the NZRU sells its package solely to Sky, Sky will still always be able to flog off their generic sports + package.

Also it is clear that how pay TV, online streaming, sports etc will all sort it self out is a very complicated one and one where even in the US they are far from figuring out. So no precedent set over there other than a very complicated situation.

[twotic]

We recently got netflix and I love it . Will probably ditch Sky sport if not the whole lot after the World Cup ....Have spoken to a few friends about this recently and it seemed like a common theme .......
Yup we have recently started using Netflix too. It's awesome. I'm a dumb arse though and didn't realise how much band width we used :) my monthly bill that is usually $69 was $229 for the month!! I would be gutted if it wasn't for a very profitable few weeks betting on the rugby :)

[stoploss]

Yup we have recently started using Netflix too. It's awesome. I'm a dumb arse though and didn't realise how much band width we used :) my monthly bill that is usually $69 was $229 for the month!! I would be gutted if it wasn't for a very profitable few weeks betting on the rugby :)

Lol , yea that was the one thing I did paid another $ 10 , to go unlimited ..first month we went from 80 Gb to 460 .......

[Zaphod]

For us Neflix is a bit of a mixed bag. Although there is a large catalogue of programmes available, many are old movies or series that simply don't interest us or we have seen numerous times. There are however a few series that we missed on TV that have proven to be worthwhile for the circa $13/month + $20/month for unlimited broadband charges. We also have Lightbox which we watch regularly.

Netflix's long-term strategy is to obtain further exclusive original content deals, in the same fashion as they already have with House of Cards, Narcos etc. In the US, they have elected not renew content licencing with Epix which will see a huge swathe of movies removed from their library. Presumably this will provide them with more funds to pursue exclusive content.

Sky still have an opportunity to embrace the new on-demand/streaming model and have made various noises about integrating this service with their existing decoders. IMO they are taking far too long, and what they have delivered, namely SkyGo, leaves a lot to be desired. Pricing has also become a significant issue, as consumers are not seeing value for money in the services they provide.

The bottom line for me is that as an investor, I am simply not interested.

[Hoop]

Yup we have recently started using Netflix too. It's awesome. I'm a dumb arse though and didn't realise how much band width we used :) my monthly bill that is usually $69 was $229 for the month!! I would be gutted if it wasn't for a very profitable few weeks betting on the rugby :)
I hope you are now on unlimited probably for not much more $$/month.
I've got a house full of Teen and twenty somethings and have wireless devices everywhere...I'm proud to announce that We joined the terabyte club last year.. 1.14TB/month to be precise...we normally use around 400Gig a month on the $99/month fibre plan.....Obviously from this you all can gather we don't have SKY any more as get all the sports I want off the internet and some of it is in 1080P HD.......and as a bonus we double up the Genius modem/router as a heater :D..

[RTM]

For me Sky is simply to expensive for what you get. Although I do have it at the moment.... 6 months, Sport, SOHO, Basic and MySky as a special...they called me....just less than $50 per month. Will get me through the world cup. I hate the monopoly they have, I hate the way they add additional progs that you really don't want and ratchet the price up a dollar or two. once or twice a year. I do like the MySky Recorder.

I noted this in their 2015 Full Year Result statement:

"Average revenue per subscriber per month (“ARPU”) increased by 2.6% to $79.54 from $77.52 last year.
SKY’s subscriber base dropped 1.5% to 851,561. SKY is now in 47% of New Zealand homes."

So basically....its got more expensive still for the user.

I also think we have managed access to live sport (which I love) really badly in this country. Unless one has SKY, then until recently with improved streaming, its been really difficult to access it. I think this has had a negative affect on our society overall, to many kids are not seeing live sport, therefore are less inclined to engage in physical activity, more inclined to hang around malls etc. I know its not the complete problem....but I see it as a component that's for sure.

Am enjoying watching some older series on Lightbox via the PS3, seems to work well enough.
Its kinda ironic that in these days of really flash TV's....my picture quality is somewhat strangled by the internet. Not sure that we'll get fiber where we are....but most stuff streams reasonably well.

Yes, you guessed it, I won't be investing in SKY.

Cheers
RTM

[twotic]

I hope you are now on unlimited probably for not much more $$/month.
I've got a house full of Teen and twenty somethings and have wireless devices everywhere...I'm proud to announce that We joined the terabyte club last year.. 1.14TB/month to be precise...we normally use around 400Gig a month on the $99/month fibre plan.....Obviously from this you all can gather we don't have SKY any more as get all the sports I want off the internet and some of it is in 1080P HD.......and as a bonus we double up the Genius modem/router as a heater :D.. Yup!!!!!!!!!!!!

[nextbigthing]

Sunset industry, this is a classic "value trap" in my opinion.

Completely agree, they're dying a slow death and need to reinvent themselves or face obliteration from the NZX.

If only shorting NZ stocks was easier.

[Hoop]

RTM with technological rapid advancement there ways and means around most problems..

I found out when ditching SKY that MySky was interwoven into Mrs Hoop's lifestyle..So I suspect that sport is not the only Saviour but also the "blocked" PVR called MySky recorder ..
I finally made a compromise with Mrs Hoop by buying a Samsung 3 channel PVR which does the same thing as MySky plus a lot more as it is an unblocked PVR and therefore is also a wireless media centre..Paid it off in 4 months with the saving from the canceled SKY subscription.....


Yup!!!!!!!!!!!!

:D:D

[Baa_Baa]

We dumped Sky a few months ago, and don't miss it. Had it since 1990, I added up roughly what I've paid and in hindsight would've preferred a new car!

The technician that came to de-install Sky and take away the decoder said that most of his work nowadays was removing Sky connections and installing internet services.

I'm saving 66% off my previous combined Internet + sky bills and now have VDSL internet (10x faster than old ADSL), and we're trialling Lightbox and Netflix. Amazing quality pictures, much better than Sky ever was, not sure how that worked out but it does, even when beamed from a smartphone (using Apple Airplay)!

We also have a landline phone in the internet bundle, but will save another $10mth as I will cancel that now that we have been upgraded to unlimited voice calls on our mobiles.

I bought a Freeview box for the plain old TV channels that the missus just can't live without.

I was bitterly disappointed by SkyGo, but that was magnified by me only ever trying to use it when a AB's game or the Hurricanes were playing. It is utter crap. I'll probably buy the Sky FanPass for the World Cup and watch it over the internet connection.

Summary for me ... I've saved money, have better quality picture, unlimited data and a massive choice of viewing, the whole family love it, we don't miss Sky one bit, and can get it on internet when we want it anyway.

There's no way I'd be buying SKT. I think they're in deep doo doo.

[Nasi Goreng]

Of all the companies on the NZX, Sky looks like the most vulnerable to disruption.

There will be a point somewhere where management will need to cut off a leg (remove the bundle which has historically been their power), this will make the share price tank but could possibly save the business for the long term. This will be a brave move and the management/shareholders may not be up for it until it's too late.

3-4 years from now ESPN or some other player could do a huge bid for rugby and cricket rights. If they fall, its check mate.

[RGR367]

Less than 2 months (due RWC2015) to go before I cut ties with Sky tv. Would be a lot sweeter breakup if the AllBlacks win the Cup again :) We mostly go out for a good reviewed film and sometimes playing chess online is a lot more enjoyable than watching uninteresting reruns of films we've seen.

disc: never been a shareholder of the stock

[KiwiGekko]

I remember being in a meeting with senior Telstra executives and a comment was made regarding launching new GB plans (as TPG had just done), as to why bother, as households only had one computer and it could never use that much data in a month. Most of the other Telstra executives agreed. The rest of us just virtually rolled our eyes and wondered why the hell we were working there.

Classic. Unfortunately it seems learning from past mistakes is not something society seems to be good at. After all... "640K is more memory than anyone will ever need."

[Regi]

1 question, 1 comment.

What are people doing for the world cup? Sky sports or some other service (please name)?

Secondly, those of you using Netflix be aware that while even the NZ version is fantastic (for the majority of you), it's easy to trick your computer into getting you onto the UK or US version of Netflix which as you've probably heard have a significantly larger offering. I don't know about the other ISP's (I imagine ones like orcon etc might do) but I am with Slingshot and they have a global roaming mode that literally has a Netflix region selector allowing you to select your version of Netflix at the click of a button :)

[brend]

1 question, 1 comment.

What are people doing for the world cup? Sky sports or some other service (please name)?

Secondly, those of you using Netflix be aware that while even the NZ version is fantastic (for the majority of you), it's easy to trick your computer into getting you onto the UK or US version of Netflix which as you've probably heard have a significantly larger offering. I don't know about the other ISP's (I imagine ones like orcon etc might do) but I am with Slingshot and they have a global roaming mode that literally has a Netflix region selector allowing you to select your version of Netflix at the click of a button :)

I thought NZ ISPs had to switch that off?? http://www.zdnet.com/article/global-mode-dead-in-new-zealand-as-isp-settles/

Checkout getflix - btw geounblocking isn't illegal but its kinda a grey area?

[Tomtom]

I'm pretty sure I heard an exec from Sky saying broadcast TV was dead a few years ago. Of course realising your own business model is about to change and having the wherewithal to do something about it are quite different things. Sky did try some sort of a streaming service for content however didn't they?



I've not had a telly in years now any way so few people could be more out of touch. Are Briscoes still having a sale?

[Baa_Baa]

1 question, 1 comment.

What are people doing for the world cup? Sky sports or some other service (please name)?

Secondly, those of you using Netflix be aware that while even the NZ version is fantastic (for the majority of you), it's easy to trick your computer into getting you onto the UK or US version of Netflix which as you've probably heard have a significantly larger offering. I don't know about the other ISP's (I imagine ones like orcon etc might do) but I am with Slingshot and they have a global roaming mode that literally has a Netflix region selector allowing you to select your version of Netflix at the click of a button :)

Is there another service for the World Cup (other than FanPass)?

[Regi]

I thought NZ ISPs had to switch that off?? http://www.zdnet.com/article/global-mode-dead-in-new-zealand-as-isp-settles/

Checkout getflix - btw geounblocking isn't illegal but its kinda a grey area?

Hey Brend,

I don't know this area of the law that well sorry but I can tell you that Slingshot still has Global mode that lets me watch U.S/UK Netflix and other sites that are usually region locked such as BBC iPlayer. It's bloody brilliant.

Definitely a grey area but with it being easy enough to setup VPN's etc to get around it I think they have come to terms with it. Geounblocking is rather cheeky I'd call it but as you say, certainly not illegal which is of course to the annoyance to say, TVNZ here. When it was still 'new' Slingshot put an advert on T.V showing it off... the slow fellas at TVNZ took a while to click onto the implications this would have for them and immediately stopped the ad from showing.

P.S US Netflix is awesome. Do it. :t_up:

[Baa_Baa]

... snip ... I'll probably buy the Sky FanPass for the World Cup and watch it over the internet connection.

Having been scathing of SkyGo, the high subscription price of SkyTV and cancelling my account, I did try Sky FanPass.

On the upside, FanPass is working very well, an easy download App to my smartphone and simple sign-up / payment process for the 4 Sky Sport channels. I'm beaming the iPhone picture via AirPlay (AppleTV) to the big screen, the picture quality is great, with no lag (VDSL internet), so now enjoying the WRC. I could watch on my laptop and/or beam that to the TV as well.

On the downside, I think the current pricing for Sky Sport channels is too high, so I won't be tempted to keep renewing the weekly $19.99 subscription and the daily price $14.99 is a rort imo. There is no 'on demand' option for the Sky Sport channels, that's annoying! They should introduce 'on demand' option, a 'watch once live' low price option, and a monthly subscription.

So there you go. I still don't think FanPass will be the saviour of SKT but they've done good finally getting an internet service that works well.

[brend]

Having been scathing of SkyGo, the high subscription price of SkyTV and cancelling my account, I did try Sky FanPass.

On the upside, FanPass is working very well, an easy download App to my smartphone and simple sign-up / payment process for the 4 Sky Sport channels. I'm beaming the iPhone picture via AirPlay (AppleTV) to the big screen, the picture quality is great, with no lag (VDSL internet), so now enjoying the WRC. I could watch on my laptop and/or beam that to the TV as well.

On the downside, I think the current pricing for Sky Sport channels is too high, so I won't be tempted to keep renewing the weekly $19.99 subscription and the daily price $14.99 is a rort imo. There is no 'on demand' option for the Sky Sport channels, that's annoying! They should introduce 'on demand' option, a 'watch once live' low price option, and a monthly subscription.

So there you go. I still don't think FanPass will be the saviour of SKT but they've done good finally getting an internet service that works well.

This was listed on the news a few days ago.

ITV player works well.

http://www.stuff.co.nz/business/industries/72187663/rugby-world-cup-sky-tv-expects-world-rugby-to-defend-exclusive-rights

[clip]

1 question, 1 comment.


What are people doing for the world cup? Sky sports or some other service (please name)?


Secondly, those of you using Netflix be aware that while even the NZ version is fantastic (for the majority of you), it's easy to trick your computer into getting you onto the UK or US version of Netflix which as you've probably heard have a significantly larger offering. I don't know about the other ISP's (I imagine ones like orcon etc might do) but I am with Slingshot and they have a global roaming mode that literally has a Netflix region selector allowing you to select your version of Netflix at the click of a button

I'll be streaming the RWC games on any one of the multitude of free (illegal) places that will play it. If the game is on at a reasonable time in NZ i'll go to the pub and watch it, buy a few beers, and support the economy in that manner. There's a website called reddit where 90% of the time links are posted to a certain user's youtube channel who streams major sportgames in 1080p with no lag. Otherwise there's a backup site which has multiple links/streams to games, you get a bit of lag and not full quality - but the last 4 games i've watched, it's been better than a paid-for MySky stream!!!!
Sure, I may be circumventing the law in doing so, but were Sky to let me pay $20 a month just to have sports I would happily do so. In my opinion, i am boycotting the monopoly Sky hold over the payTV industry and hope that one day they will break out movies/comedy/sports into individual packages at reasonable prices - in which case I will have no objection to pay for the content I want at a fair price! And 90% of the people I know in my generation have the same feelings - we don't want everything for free/pirated, we just don't want to be ripped off. Auckland house prices/rents are hard enough as it is for the up and coming generation.

I'm a late 20's geek who previously has always been big into pirated music/movies, but only because no providers offered the content I wanted at a reasonable price. I don't think it's fair that we have to wait up to a year and a half to watch a TV show that has already been aired in the states. I now pay for and use Spotify exclusively for all my music (haven't pirated a song in years), and happily pay for Netflix, even though some of the shows I watch through a different, not-so-legal, program. At least the shows are still getting exposure/royalties by my netflix fees right? Sites like bandcamp have the right idea, where indie/unknown artists list their albums, free to listen to, but if you want to download it you pay whatever you want. You can pay $1 or $20 and still receive the album - and some of my favourite artists on there I have paid even $15US for a 5-track EP, because I know the money is going to the artist I like/support, and not to a record label.

Protip for users who pay for Netflix NZ and want the US catalogue - there's a browser plugin/addon called 'ZenMate' which adds a nifty little shield icon in the top-right corner of Chrome or Firefox. Turn it on, you have the massive US catalogue, click it again to turn it off and you're back to the NZ one. Regardless, Netflix are still receiving $12.99 US/m from me, I don't have any moral objections to circumventing region-restricted content distribution when I have been a paying subscriber since long before Netflix was made available to NZ

[Onion]

At least the shows are still getting exposure/royalties by my netflix fees right?

Netflix will certainly have your money but it's my guess is that Netflix will only pay royalties for movies/shows that people watch via Netflix.

[clip]

I think you're probably right on that point Onion, however the shows I am watching aren't available on Sky, Lightbox, Neon or any NZ offering. So maybe i'm the sucker for paying for nothing! Who knows :)

[brend]

You hit the nail on the head clip. Coming in that same age group dc++, lans and torrents were our go to for content.

I will happily pay for US Netflix as I feel that it's great value for money, sky isn't ...veitchy (sports talk) a few weeks ago gave the opportunity for listeners to call and discuss sky sports. Majority of people who called in were sick of sky based on costs and content and were likely to unsubscribe after rwc.

Do directors really an increase in fees? Lucky I'm no shareholder.

P.s Try out Itv player for the World Cup, hd quality and free.

[Bjauck]

You hit the nail on the head clip. Coming in that same age group dc++, lans and torrents were our go to for content....

Since the dumbing down of TV One and NZ TV in general a lot of older codgers were in the same boat. It is when you go to the UK & even Oz you see the quality available (free & ad-free) on BBC i-player and ABC i-view.

Sky subs are expensive. I would be interested in a cheaper internet-only package with options to pay for individual programs or sports events. Sky pick 'n mix!

[freddagg]

The Sky man is picking up my decoder today. I have had Sky for 19 years but have now had enough of their advertisements and expensive subscription.

[Joshuatree]

Interesting thread ; thanks for bringing this techno phobe up to date; lots of options out there.My daughter set up netflix but we never watched it as the choices were so limited and many B grade so ditched it.But if you can add USA and other net flicks it maybe worth a revisit. Still have the basic Sky package atp and without it what do you do to watch occasional local content? Free view doesn't attract, seems a backward step. Have Apple TV which hooks into other options.

[winner69]

The Sky man is picking up my decoder today. I have had Sky for 19 years but have now had enough of their advertisements and expensive subscription.

So the profit warning is all your fault mate?

Looks like many followed your example

[Beagle]

So the profit warning is all your fault mate?

Looks like many followed your example

When the sky guy came to collect my decoder many months ago I asked him if he did many installs these days ? Just for people shifting house mate. Interesting comment from the coal face don't you think !
Today's confirmation of the beginning of a death spiral to profit doesn't surprise me one iota.

[blackcap]

This one was in hindsight easy to pick> I was mulling whether to go short or not but saw on the chart that it had already dropped about $2 odd so never entered the contract. I recently installed SKY (for the rugby and cricket) but they were giving away 2months free, 6 month contracts, a Free book, 2 months free my sky etc and they had to put a new dish up where I live because the old one had rusted away (can't be cheap putting a new dish in etc) when im going to give it up after 6 odd months anyway. Their model is in my opinion failing and they will die (the company) unless something drastically changes there.

[xafalcon]

If you compare Sky's market penetration to the dominant pay TV operators in most other countries, you will see how well they have done (almost entirely as a result of zero competition and zero regulation, rather than being so much better than any other pay TV operators). There was only one way for profit to go once viable mainstream alternative options became available

Linear programming has it's place - in rural areas where broadband is very narrow, the baby boomers, commercial operators in particular

But the good days are now behind sky TV as more of their content is cherry picked when it comes up for renewal, less income reduces their ability to out-bid new competitors, etc

[LAC]

The guy from NZSA (John I think it was) tore a new one for the CFO, The chairman and CFO just fluttered around with no real answers. John Fellet wasn't there either so I think other than the profit forecast, there just seems to be no confidence in Sky and it's board.

[bull....]

only got sky for cnbc, might be better if you could watch whole series at once of tv

[Toulouse - Luzern]

... I have had Sky for 19 years but have now had enough of their advertisements ...

Agree.

I used to watch CNBC a lot.

Not now, there is too much repetitive, self promotion.

It's interesting how a channel, that can readily survey viewers responses to this *, has created the biggest negative to viewing, and may be losing customers.

Simple action for them to fix this.

* One example "it's on the plane, it's in the elevator ...

[beetills]

Oddly enough the SKY salesman came knocking on my door last night.After listening to his sales pitch i told him i was unemployed and had better things to spend my money on.He replied ""it's only a dollar a day'' Isaid weren't you listening and shut the door.

[Beagle]

Agree.

I used to watch CNBC a lot.

Not now, there is too much repetitive, self promotion.

It's interesting how a channel, that can readily survey viewers responses to this *, has created the biggest negative to viewing, and may be losing customers.

Simple action for them to fix this.

* One example "it's on the plane, it's in the elevator ...

I also used to watch CNBC a lot and gained the occasional business insight from it but really their so called experts they have on there have been as reliable as (a monkey throwing darts at a dartboard) in terms of market direction, oil prices e.t.c. Its all freely available on www.cnbc.com anyway and you can cherry pick whichever news item you fancy without having to suffer their endless and extremely repetitive self promotion.

[Baa_Baa]

Can't see what all the fuss is about, Sky got Mr Handley on the board now, they can see talent where SNK couldn't. Tui time.

[Nasi Goreng]

You can get Bloomberg news for free via Apple TV. Combine that with CNBC.com and you would not be missing out on much by dropping sky.

[GTM 3442]

I also used to watch CNBC a lot and gained the occasional business insight from it but really their so called experts they have on there have been as reliable as (a monkey throwing darts at a dartboard) in terms of market direction, oil prices e.t.c. Its all freely available on www.cnbc.com anyway and you can cherry pick whichever news item you fancy without having to suffer their endless and extremely repetitive self promotion.

Aye, there's the rub. The ". . . endless and extremely repetitive self promotion."

It's almost as annoying as Sky's refusal to let me the customer pick which channels I want, and instead forcing me into a package, 90% of which I have no interest in. And then thinking I'll be happy to pay for watching advertising.

Sky did extremely well in the days of simple cable/satellite TV. But them days is gone.

[kiwi_on_OE]

Sky in UK share price nearly doubled since 2012, and just announced 10% increase in quarterly profit. Can Sky in NZ match that? If not, why not?

[Jay]

Heard that too K on OE - What are they doing that Sky NZ are not - have not looked into to any great depth.
I note they do Sky TV + Broadband + Calls and looks like Apps to watch your package on as well - i.e. not thru your TV/ set top box

[xafalcon]

Sky in UK share price nearly doubled since 2012, and just announced 10% increase in quarterly profit. Can Sky in NZ match that? If not, why not?

Sky has been a monopoly operator in NZ for over 20 years, BSB has had competition. As a result Sky's market penetration is huge compared with most other countries dominant pay TV operator. Now that Sky faces competition for subscribers and competition for content, it's cost rises and income falls. There is also rumour of regulation if the left are re-elected. Sky's best days are in the past. There will be a continual decline in subscribers as more people seek to obtain only the content they really want, rather than Sky's bundled packages

[Harvey Specter]

Heard that too K on OE - What are they doing that Sky NZ are not - have not looked into to any great depth.
I note they do Sky TV + Broadband + Calls and looks like Apps to watch your package on as well - i.e. not thru your TV/ set top box
Many years ago now but broadband was free with sky over there - just all bundled up in the price. Why skyNZ hasn't become a naked broadband reseller I'm not sure - rather they use Vodafone to resell their service.

[Zaphod]

Many years ago now but broadband was free with sky over there - just all bundled up in the price. Why skyNZ hasn't become a naked broadband reseller I'm not sure - rather they use Vodafone to resell their service.

There's not a lot of margin in it and there is significant competition. IMO they are better to stick with their core business. Having a strategic partnership with a telco and providing an uncapped service for streaming Neon/SkyTv shows seems to best solution to me.

[BIRMANBOY]

Sort of got interested in this recently...dividend is looking healthy at this SP level....interested in others opinions.

[Beagle]

Well said KW. Thread title says it all. Death by 1000 cuts. I predict the demise of this company will be slow and steady so its unwise to look at this company as a reliable dividend payer based on historical dividends. I guess if you model future dividends off the current year's EPS decline going forward with say a 10-13% reduction each year and from a dividend yield basis using a DCF model it still looks attractive some sort of case can be made for investment but quite frankly I am far more interested in companies that grow, (as are most people).

[sb9]

Well said KW. Thread title says it all. Death by 1000 cuts. I predict the demise of this company will be slow and steady so its unwise to look at this company as a reliable dividend payer based on historical dividends. I guess if you model future dividends off the current year's EPS decline going forward with say a 10-13% reduction each year and from a dividend yield basis using a DCF model it still looks attractive some sort of case can be made for investment but quite frankly I am far more interested in companies that grow, (as are most people).

Couldn't agree more, past divvies are a no guarantee of future prospects especially in light changing industry trends.

Disc: Never a holder, however was a customer (disgruntled) in the past.

[Zaphod]

A dividend is sustainable only so long as the company's cashflows. Which last only so long as they have customers.

Long term there is no future for local Pay TV providers - global operators like Netflix and the Direct to Customer model (eg. Sports leagues selling yearly access passes) will be the norm.

I complete agree with the former point, but I think there is still a future for local pay tv providers, albeit in a somewhat different market than what currently exists.

Netflix is shifting away from providing movies/syndicated series and towards providing their own original content (House of Cards, Marco Pollo etc.) Although they have been quite vocal on pressing for reform of the distribution rights system to allow for a global right, they do not have appeared to have made any headway. Studios will take a very long time to shift on this point. Amazon Prime has an excellent range of movies, but their series are relatively lackluster, while Apple has a fair balance of both although I note that their content is heavily censored.

I am not sure however that SkyTV currently has the right people on board at the senior management/director level to rise to this challenge.

[Sideshow Bob]

Sky have spent a lot of money of late, but have yet to see the rewards in the market. I didn't realise until recently that they own Fatso - which is basically akin to owning a big video store - everyone knows the future of them. When does it get to a stage where get to the next generation of leadership? More in-sync with the market and today's generation. Many of the senior management have been there since they started in 1990!

The key for Sky remains sport and particularly rugby. If the splintering of coverage with losing the likes of the golf and EPL continues, then it will be increasingly difficult. Would be interested to know how Coliseum is going with their on-line business.

If Sky ever lost the rugby they would be well and truly fuxored.

[sb9]

Sky have spent a lot of money of late, but have yet to see the rewards in the market. I didn't realise until recently that they own Fatso - which is basically akin to owning a big video store - everyone knows the future of them. When does it get to a stage where get to the next generation of leadership? More in-sync with the market and today's generation. Many of the senior management have been there since they started in 1990!

The key for Sky remains sport and particularly rugby. If the splintering of coverage with losing the likes of the golf and EPL continues, then it will be increasingly difficult. Would be interested to know how Coliseum is going with their on-line business.

If Sky ever lost the rugby they would be well and truly fuxored.

Just my thoughts on the last line of yours, if and when that happens its all curtains down!!!
All through the years they are in business if they acted bit more proactively and listened to customer needs they would've been in much better position than currently are. As the saying goes "what goes around comes around (to bite you)". That's my vent.

[BIRMANBOY]

Thanks for above comments.....the actual potted financials show a somewhat less pessimistic viewing however... Revenue rising year on year last 5 years, net profit after tax same, liabilities down same, div remains constant, total subscribers steady .......what am I missing?







Summary of Financial Data







Financial Overview







Year Ended 30 June (NZ$m)
2015
2014
2013
2012
2011


Total revenue
928
909
885.0
843.1
797.0


Operating expenses (incl. depreciation)
548
530
531.9
641.2
600.2


Net profit/(loss) after tax
171.8
161.4
132.2
122.8
120.3


EBITDA*
379.8
379
353.1
336.0
321.7


Fixed assets
299.1
302.9
338.0
388.3
391.3


Total assets
1942
1865.4
1900.2
1962.5
1940.6


Total debt & lease liabilities
350.7
387.2
483.8
472.5
418.3


Total liabilities
604.8
624.2
718.4
708.6
643.0


Total equity
1337.2
1241.2
1181.9
1253.9
1297.5


Capital expenditure
114.7
99.2
83.6
132.3
139.6


Total Dividend cents per Share* *
30
29
24
54.0
43.5


* Earnings before Interest, Tax, Depreciation, and Amortisation.
* * SKY's first Dividend payment was in 2006 of 8.0 cps







Subscriber Numbers







Total UHF, DBS and other subscribers
As at 30
Jun-15
As at 30
June 14
As at 30
June 13
As at 30
June 12
As at 30
June 11


Total no. households in NZ (1)
1,682,200
1,664,100
1,648,500
1,636,000
1,626,000


Subscribers:







Residential - MY SKY
549,906
504,713
456,419
382,495
279,875


Residential - Digital
221,596
287,056
330,084
398,992
479,212


Other Subscribers (2)
80,059
73,286
69,395
65,444
70,334


Total subscribers
851,561
865,055
855,898
846,931
829,421


Percentage of households subscribing to SKY:







Total UHF & DBS - residential
47.10%
48.70%
49.00%
49.40%
48.70%


Gross Churn Rate (3)
14.50%
13.20%
14.40%
14.20%
14.00%


Average monthly revenue per residential subscriber:







DBS
$63.40
$61.56
$62.53
$62.65
$65.19


MY SKY
$89.50
$87.22
$86.89
$84.69
$84.79


Notes:


Based upon New Zealand Government census data.
Includes subscribers receiving SKY packages via affiliate services, such as arrangements with TelstraClear and Telecom.
Gross churn refers to the percentage of residential subscribers over the 12 month period ended on the date shown who terminated their subscriptions, net of existing subscribers who transferred their service to new residences during the period.







http://www.skytv.co.nz/DesktopModules/FourthMedia_Articles/images/nextButton.gif (http://www.skytv.co.nz/Default.aspx?tabid=158&art_id=2203)






http://www.skytv.co.nz/images/progressbar.gif

[BIRMANBOY]

That presupposes no counteraction and or fight back from SKY..I find it hard to believe they will just accept having their business gutted (if that is your inference). Look at the transformation between SPK and TEL. These types of companies live and die by how they react to constant change so I find it hard to believe that Sky wont have a plan in action. However all a bit to crystal ball like to me. Will wait and see.
The impact of Netflix, Lightbox, and other providers that have all launched this year. This will begin to show up in the FY16 numbers

[xafalcon]

Sky has been gouging customers for years, and their customer know it. Many are looking for reasons to leave. Much content is available elsewhere, and younger demographics know how & where to find it for less/nothing. Selling access rights direct to consumers maximises profits for the producers and minimises costs for the end user. This model will become more common, and lead to fragmenting rights sales by delivery platform - internet, apple TV, linear programming, SVOD etc. So Sky is facing a perfect storm - customer dissatisfaction, competition, aging subscriber base, potential non-exclusivity

As an example, take a look at sky movies. Since the competition arrived there have been plenty of "pop-up" additional content at no extra charge, and zero subscription cost increase at the annual review

Sky will be forced into a downwards spiral of reducing subscribers, reducing profit, reducing content buying purse, providing additional content for the same or less subscriber cost etc

[BIRMANBOY]

Hah and LOL ...you just wrote off almost one billion dollars per year in revenue in two sentences. Amazing.
I'm sure Blockbuster video had a plan as well. You can plan all you like, but the world changes around you and not everyone survives. Creative destruction. Its how we evolve.

[macduffy]

No, it won't happen quite as quickly as that, more a case of death by a thousand cuts, I would think. But over time SKT will lose customers, lose revenue, have less clout to buy the popular content. A vicious circle, as several posters have opined.
I resisted the trend for a while, although did sell down partly last year, but have now accepted that SKT isn't going to be the company that it once was when News Ltd bought out INL and I became a shareholder. A great run while it lasted and a fortuitous escape from the problems that beset print media. But that was then - and now pay TV is facing similar challenges.

[GTM 3442]

That presupposes no counteraction and or fight back from SKY..I find it hard to believe they will just accept having their business gutted (if that is your inference). Look at the transformation between SPK and TEL. These types of companies live and die by how they react to constant change so I find it hard to believe that Sky wont have a plan in action. However all a bit to crystal ball like to me. Will wait and see.

Having a plan is quite different to being able to implement a plan.

As I see it, we started with the old Broadcast TV model. A very limited (1, 2, then 3 in NZ) number of channels. You watched what was broadcast, when it was broadcast, or you missed out.

Video recorders gave viewers the abiity to control when they watched stuff, but it came from the same limited number of channels.

The Satellite/Cable model increased the amount of content available, but without recording something for later, you were stuck watching stuff when it was broadcast.

There endeth the one-to-many broadcast model.

Come the Internet, and suddenly there is an "on-demand" model. If I want to watch something, I can choose when I want to watch it, without having to either make time, or record it for later. That's a big change.

I think that it's a big enough change to mean that Sky has no inherent advantage as a content provider. They have lost their unique selling proposition.

A large corporate suddenly faced with something from out of left field seldom survives. Example - all those beautiful Nokia phones vs the Apple iPhone. Blindsided.

And I bet that Nokia had lots of plans.

No doubt Blackberry did too. . .

[Bobdn]

Tivo would have been just the sort of company I know I would have invested in if I had lived in the States, but it's really gone backwards over the last 10 years. I have a Tivo! It's an easy-to-use device which captures content across free view channels. Five years ago I would have described it as my number one gadget. I loved it.

Over the last year, however, i haven't used my Tivo once. Not once. How many times have I watched live broadcast TV over the last year? Well, there was the Rugby World cup final the other week on Prime and... that's pretty much it. This is all down to Lightbox (free from Spark)and Netflix (just $13 per month) and my fantastic Chorus/Spark supplied VDSL connection.

Still, I wouldn't write off Sky just yet. I see Cable companies in the States are still expected to do well over the next five years or so. My parents, in their early 70s, will probably still be around in the next 20 years. They have Sky, will keep it out of habit, and there are plenty like them around.

http://www.businessinsider.com.au/cord-cutting-doesnt-spell-doom-for-cable-companies-2015-7

[troyvdh]

Thanks Mr Falcon...well said...May I suggest its a repeat of the Telecom debacle...cheers

[Arbroath]

As that great philosopher Mike Tyson once said...

"Everybody has a plan until they get punched in the face".

[Baa_Baa]

I think the real threat to Sky in the short-to-medium term is less about the delivery mechanism as they can catch up with that, and Fanpass is good example of how quickly they can can change delivery when they want to. They have quickly proven they can move to delivery via internet enabled on-demand channels without too much fuss. What Netflix et al figured out though is that it isn't enough, it's about content, the stuff people really want to watch and are prepared to pay for, so Netflix commissioned unique content developed and programmed within their own brand. That's a big ask for Sky which subscribes to content. They probably won't choose to take the true disrupter route and commission direct content as that is a massive investment and would screw their business model massively, it's highly risky and way outside their MO. But you can't ignore what is getting traction in the dis-intermediated and disrupted online media broadcast industry. Fortunately Sky have a new director who gets that, but what influence can one individual have on an institution?

[Zaphod]

And the original content is not substitution for existing shows


No, Netflix have clearly signaled original content would be the primary focus of their strategy going forward. We have already seen the result of this with content removed form Netflix as the procurement budgets are applied to acquiring original content. This momentum will continue to build, as will their fees.

[Marilyn Munroe]

Here is a link to a site that discusses challenges USA pay TV providers face;

http://bgr.com/2015/12/11/cable-tv-decline-cord-cutting/

Boop boop de do
Marilyn

[Zaphod]

Rubbish. They have signed multi-billion dollar deals with studio houses like Disney for their content. The only content they are choosing to release is content that is non-exclusive to Netflix.
http://www.whats-on-netflix.com/coming-soon/disney-pixar-lucasfilm-and-marvel-movies-coming-to-netflix-over-the-next-4-years/

Yet despite what you say, Netflix's focus on original content and accompanying budgetary movements are well documented. No matter, what we do agree on is that Sky are in serious trouble and their foray into the streaming market is too little and is very late.

[Jay]

I see in the weekend paper that Sky are after the premier league again, will help their cause if they get it, as long as they do not spend everything trying to get it of course, though I understand they the "tenders" are all in just waiting for the powers to make a decision.
Does not bother me either way, don't watch soccer.

BTW how many Mb/GB does a couple hours of TV consume lets say HD content for arguments sake??

[TideMan]

BTW how many Mb/GB does a couple hours of TV consume lets say HD content for arguments sake??

That's an interesting question............
We have both Lightbox (free year's sub from Spark) and Quickflix ($120 for a year).
An hour-long program on Lightbox uses about 4GB, whereas the same on Quickflix uses less than 2GB.
Similarly, Sky Go (live streaming) is about 1 GB an hour, though the picture quality is quite low.
I haven't figured out why Lightbox takes so much bandwidth. We cannot tell any difference in picture quality between Lightbox and Quickflix.

[Master98]

I'm in at $4.19,despite many negative posts here but I see value at this price tag, fy16 earnings 40cps and dividend 30cps is compelling, SKT is still a big company,still making lots of money.

[troyvdh]

For what's it's worth...I rang sky..asked for a substantial discount for 3 months...as did my partner...got same...cancelled sky sports...now watch same most sports on line some free some not..this scenario appears spookily as TEL...I.e. Folk cannot be screwed for ever.......just saying...

[Zaphod]

That's an interesting question............
We have both Lightbox (free year's sub from Spark) and Quickflix ($120 for a year).
An hour-long program on Lightbox uses about 4GB, whereas the same on Quickflix uses less than 2GB.
Similarly, Sky Go (live streaming) is about 1 GB an hour, though the picture quality is quite low.
I haven't figured out why Lightbox takes so much bandwidth. We cannot tell any difference in picture quality between Lightbox and Quickflix.

Generally speaking, SD programmes consume about 1GB/hr, while HD consumes around 3-4GB/hr, and UHD consumes around 8Gb/hr. The final throughput can depend on a multitude of factors including network congestion, codec used by the broadcaster, etc.

The last time I checked (early this year) Quickflix streams always originated from Australia, while Lightbox have equipment in NZ so that will help bandwidth and consequently video quality immensely.

[RGR367]

For what's it's worth...I rang sky..asked for a substantial discount for 3 months...as did my partner...got same...cancelled sky sports...now watch same most sports on line some free some not..this scenario appears spookily as TEL...I.e. Folk cannot be screwed for ever.......just saying...

I was told to wait for the call from "disconnection team" when I told them I wanted to cancel my subscription. Got that call and was requested to wait (about 15 mins at least) for a marketing Rep. As I told them that their movies are always tired and old nowadays, the marketing Rep offered that if I get rid of my Movies and just stay for the Sports, I could be just paying them for 49 bucks for 3 months which will revert to $77 afterwards. Not still a good deal option since the All Blacks won the Cup already and I could save my 99 bucks/months as pocket money to the next Cup event :) So I said just disconnect me please.

Disc: never been a shareholder

[RTM]

I was told to wait for the call from "disconnection team" when I told them I wanted to cancel my subscription. Got that call and was requested to wait (about 15 mins at least) for a marketing Rep. As I told them that their movies are always tired and old nowadays, the marketing Rep offered that if I get rid of my Movies and just stay for the Sports, I could be just paying them for 49 bucks for 3 months which will revert to $77 afterwards. Not still a good deal option since the All Blacks won the Cup already and I could save my 99 bucks/months as pocket money to the next Cup event :) So I said just disconnect me please.

Disc: never been a shareholder

I have just cancelled as well and waiting on the call. Its a pity. Love the hardware but not the price.
Does anyone have any experience with CNBC / PRO ? Going to miss the news programs most of all I thinkm but figure I should be able to stream what I need / want.

[Sideshow Bob]

Share advice as posted on whale oil

http://www.whaleoil.co.nz/2015/12/sky-tv-couldnt-organise-a-root-in-a-brothel/?utm_source=dlvr.it&utm_medium=facebook

[LAC]

Share advice as posted on whale oil

http://www.whaleoil.co.nz/2015/12/sky-tv-couldnt-organise-a-root-in-a-brothel/?utm_source=dlvr.it&utm_medium=facebook

I agree with most of what he says, but the dude has def not used the new on demand platform. If does not take 20 minutes to download, it actually only needs to download the first 1% of the content and then its available to watch while the rest downloads in the background. Surprisingly enough it actually does work..... I don't have a very good internet connection at home and using Wifi it has not taken more than a minute for the movie to be available to start watching:)