SKT Sky Network Television Limited.

[carrom74]

https://www.nzx.com/announcements/342538

Key takeaway--- NZR to be given 5% stake...

[trader_jackson]

https://www.nzx.com/announcements/342538

Key takeaway--- NZR to be given 5% stake...

Don't have the cash, so give them equity.
(basically do anything you can to secure rights before Sparks, with a much bigger back pocket, nabs it)

[tga_trader]

5% share is bugger all, especially given the trajectory of the share price and no dividend, so must've still been a huge amount of cash.

[mistaTea]

I think you guys miss the point.

By NZR becoming a large shareholder of Sky, it is a strong indication of an ongoing partnership.

Makes it harder for Spark or Amazon to get the rights in the future when NZR is already an owner of a sports broadcasters.

As much as I don’t particularly like issuing undervalued shares, this is actually quite a smart move imo.

[jonu]

Will they be in trading halt until after the meeting?

[LAC]

Great partnership for Sky....def the way forward in the sports lights battle. Regardless of what others think, the new CEO is using the right thinking for a business such as Sky which is facing headwinds. This is a great outcome.

[steveb]

It's a lifeline for Sky,not so sure its a good deal for NZ rugby if Sky go belly up

[jonu]

Will they be in trading halt until after the meeting?

Obviously not. I would have thought a halt was appropriate until the deal was confirmed.

[mistaTea]

It's a lifeline for Sky,not so sure its a good deal for NZ rugby if Sky go belly up

Sky TV still have underlying earnings north of $100M.

Free cash flow alone last year was $108M.

The company has faced some stiff headwinds for sure, and this Rugby Deal is huge for the company.

But Sky are nowhere near 'going belly up'.

[Stranger_Danger]

Sky TV still have underlying earnings north of $100M.

Free cash flow alone last year was $108M.

The company has faced some stiff headwinds for sure, and this Rugby Deal is huge for the company.

But Sky are nowhere near 'going belly up'.

Do those figures take into account how much they're going to be paying for rugby going forward, or the possible loss of cricket fans?

I agree Sky TV looks cheap fundamentally based on historical earnings, but those earnings are just that - history.

[silverblizzard888]

A desperate move by SKY, but a necessary and smart move. Though can't keep giving away 5% each time you need to renew your rights.
At the end of the day subscriber numbers will continue to drop, their cost are going up and Spark Sport is going to keep attacking from all directions.
Nice gain today for those that picked up shares last week. For the current holders you better hope this isn't the last smart move SKY has under their sleeves.

[mistaTea]

Do those figures take into account how much they're going to be paying for rugby going forward, or the possible loss of cricket fans?

I agree Sky TV looks cheap fundamentally based on historical earnings, but those earnings are just that - history.

Clearly the figures don't include the latest Rugby deal. And clearly Sky TV earnings are still going to be under pressure. Hard to say by how much though, since they won't be forking out for NZ Cricket now (regrettably).

I am just making the point that the company still generates large free cash flows, and any notion that they are about to 'go belly up' is extremely premature in my view.

[mistaTea]

At the end of the day subscriber numbers will continue to drop, their cost are going up and Spark Sport is going to keep attacking from all directions.


Net subscriber numbers increased last year. And the next round of results will include RugbyPass subscribers.

I expect satellite subscriptions to be down, but NEON, Sky Sport NOW, Vodafone TV and RugbyPass subscriptions to be up - generating an overall subscriber gain.

ARPU will be lower of course, but I don't really care about that. I would rather have 1 million subscribers paying an average of $50 than 500,000 subscribers paying an average if $100 (even though Revenue is the same).

In fact, I wish they wouldn't even quote ARPU anymore. It is becoming more meaningless as time goes on.

Take me, for example. I pay $39.99 for Sky Sport NOW and $13.95 for NEON. I am one household who pays Sky $54.94 per month. But under the ARPU model I am seen as two subscribers paying $27.47 each on average.

As the trend of people ditching satellite in favour of NEON/Sky Sport NOW combinations continue the ARPU figure will become even more meaningless in my view.

[tga_trader]

Take me, for example. I pay $39.99 for Sky Sport NOW and $13.95 for NEON. I am one household who pays Sky $54.94 per month. But under the ARPU model I am seen as two subscribers paying $27.47 each on average
That's an interesting point though. Of their 750,000 (approx) subscriber numbers, how many are unique? Or is that taken into account in their numbers somehow?
It could skew the subscription decline rate as well. If 2 satellite subscribers leave, but one picks up Neon and Sky Sport then the subscription number is the same, although they actually lost one person and revenue significantly decreased.

[Bobdn]

That's my set up too. SkySport Now and Neon.

The final of Succession is on Today, express from the US. I love that show.

[bull....]

sky used all there money on rugby , cool now spark can pick off all the other sports

[silverblizzard888]

Net subscriber numbers increased last year. And the next round of results will include RugbyPass subscribers.

I expect satellite subscriptions to be down, but NEON, Sky Sport NOW, Vodafone TV and RugbyPass subscriptions to be up - generating an overall subscriber gain.

ARPU will be lower of course, but I don't really care about that. I would rather have 1 million subscribers paying an average of $50 than 500,000 subscribers paying an average if $100 (even though Revenue is the same).

In fact, I wish they wouldn't even quote ARPU anymore. It is becoming more meaningless as time goes on.

Take me, for example. I pay $39.99 for Sky Sport NOW and $13.95 for NEON. I am one household who pays Sky $54.94 per month. But under the ARPU model I am seen as two subscribers paying $27.47 each on average.

As the trend of people ditching satellite in favour of NEON/Sky Sport NOW combinations continue the ARPU figure will become even more meaningless in my view.

Total subscribers
2019: 778,840
2018: 767,727
2017: 824,782
2016: 852,679
2015: 851,561

Alright you right that recently it has gone up, but overall its a downtrend for the past 5 years and increased only by the cheaper subscriptions. You should to consider that Apple and Disney are also coming out with subscriptions too in the next couple of months. This area is getting competitive and Neon will not cope. Apart from Rugby, SKY has lost its moat in this area and things are about to get tougher, NEON licenses it content, whereas everyone else is producing original content and pricing is getting even more competitive. With churn at 14% thats a lot of convincing they will have to do to get people to stay.

[mistaTea]

That's an interesting point though. Of their 750,000 (approx) subscriber numbers, how many are unique? Or is that taken into account in their numbers somehow?
It could skew the subscription decline rate as well. If 2 satellite subscribers leave, but one picks up Neon and Sky Sport then the subscription number is the same, although they actually lost one person and revenue significantly decreased.

It definitely muddies the water. You are right in that, if all households who purchased Sky's streaming services subscribed to both NEON and Sky Sport NOW then the household penetration rate would only remain the same when 1 satellite subscription was counterbalanced by 2 streaming subscriptions.

Not everyone takes both streaming services though (and I don't know what % do).

Last year they showed that they lost 43,000 satellite subscribers - but gained 54,000 streaming subscribers. A net gain of 11,000 subs.

Impossible to untangle the figures, but it doesn't really matter anyway. All Sky need to focus on right now is slowing the satellite decline (by sorting out their pricing) and continuing to aggressively increase streaming subscription across all three services (NEON, Sky Sport NOW and RugbyPass).

[silverblizzard888]

That's my set up too. SkySport Now and Neon.

The final of Succession is on Today, express from the US. I love that show.

Agreed Succession is a good show indeed! Hard to find a good financial fiction series, apart from Billions.

[Stranger_Danger]

Take me, for example. I pay $39.99 for Sky Sport NOW and $13.95 for NEON. I am one household who pays Sky $54.94 per month. But under the ARPU model I am seen as two subscribers paying $27.47 each on average.


Perhaps this is why subscriber numbers went up last year?

[RTM]

Not sure Rugby is going to be the panacea they need.

The game/players have out grown the rules..... it’s all but impossible to referee. Head injuries alone may be enough to kill it off. The Super Rugby contest....conference style....is dog tucker (sorry Beagle/ Snoopy)
Three? years of conference rugby have put off all but the most ardent supporter.
Sky’s behaviour over the last 10 years or so have meant that it’s not automatically first port of call.
Many in the 20-40 year age bracket really don’t care about Rugby (sport?) at all.
Unlike Apple, they have not protected their ecosystem
To many other option.
I guess they have to try this. Not going to be an easy road.
Fascinating watching a dinosaur in its death throes.

[Beagle]

Agree with your sentiment's RTM. Share issue is only about $20m worth so CASH was the major means of exchange with this transaction and its clear that the cost was at an unprecedented level, whereas interest in Rugby is not. It sets a very dangerous precedent going forward for the cost of coverage for all other sports too.
My position is that if management think Rugby is the be all and end all they are sadly mistaken and I am certain there's millions of people in N.Z. just like me who would prefer to watch a good movie than a rugby game.

I think they've spent a vast amount of resources barking up one particular tree in the hope its a panacea for all their woes.

[mistaTea]

Total subscribers
2019: 778,840
2018: 767,727
2017: 824,782
2016: 852,679
2015: 851,561

Alright you right that recently it has gone up, but overall its a downtrend for the past 5 years and increased only by the cheaper subscriptions. You should to consider that Apple and Disney are also coming out with subscriptions too in the next couple of months. This area is getting competitive and Neon will not cope. Apart from Rugby, SKY has lost its moat in this area and things are about to get tougher, NEON licenses it content, whereas everyone else is producing original content and pricing is getting even more competitive. With churn at 14% thats a lot of convincing they will have to do to get people to stay.

1. It is yet to be seen how successful Disney and AppleTV+ will be in NZ. NZ is a small market and people already have a choice between NEON (Which gives HBO, Showtime, FX and more), Netflix, Lightbox, TVNZ On Demand and Amazon Prime. There is already too much to watch, and new subscription services might find it harder than they think to build up a meaningful customer base.

I have an AppleTV 4K, and it is doubtful that I will sign up to their service anytime soon. I already can't get through all of the programmes I love on NEON, Netflix, Lightbox and Sky Sport NOW.

2. Sky TV does still have competitive advantages (even though every single analyst will describe Sky as 'no-moat').

They have a narrow 'Networks' moat. Sky still have good relationships with key content produces across entertainment and sport. If you want to subscribe to this content legally, Sky is the only place to go in NZ. We can speculate until the cows come home whether HBO (for example) will want to go direct with HBO Max in a few years when their current license deal comes to an end - but that would be pure speculation, and my view is that that prospect becomes less appealing in this already saturated and small market.

The other competitive advantage Sky have is their satellite technology (I can hear everyone gasping as I write this - absolute anathema!).
This would be very expensive for a competitor to replicate. And satellite is still the only reliable tech in a country like NZ in terms of being able to broadcast entertainment and live sporting events across the entire country. That is still a selling point, particularly for Sport. NZ Cricket have made a big call going for a streaming-only service - the wrong call in my view, if they are serious about ensuring all NZers have the ability to watch the matches.

Yes, Sky continue to lose satellite subscribers because their pricing is not compelling - but that is easily fixed.

[silverblizzard888]

Not sure Rugby is going to be the panacea they need.

The game/players have out grown the rules..... it’s all but impossible to referee. Head injuries alone may be enough to kill it off. The Super Rugby contest....conference style....is dog tucker (sorry Beagle/ Snoopy)
Three? years of conference rugby have put off all but the most ardent supporter.
Sky’s behaviour over the last 10 years or so have meant that it’s not automatically first port of call.
Many in the 20-40 year age bracket really don’t care about Rugby (sport?) at all.
Unlike Apple, they have not protected their ecosystem
To many other option.
I guess they have to try this. Not going to be an easy road.
Fascinating watching a dinosaur in its death throes.

Very much agree, theres a huge reduction in youth wanting to participate in sports these days, especially with parents wanting their kids to be safe and the addiction to technology.
Theres a competition for everyones eye balls and Google with their Stadia platform for gaming will steal a whole lot of subscriptions of people age between the 20-40 too.

[silverblizzard888]

1. It is yet to be seen how successful Disney and AppleTV+ will be in NZ. NZ is a small market and people already have a choice between NEON (Which gives HBO, Showtime, FX and more), Netflix, Lightbox, TVNZ On Demand and Amazon Prime. There is already too much to watch, and new subscription services might find it harder than they think to build up a meaningful customer base.

I have an AppleTV 4K, and it is doubtful that I will sign up to their service anytime soon. I already can't get through all of the programmes I love on NEON, Netflix, Lightbox and Sky Sport NOW.

2. Sky TV does still have competitive advantages (even though every single analyst will describe Sky as 'no-moat').

They have a narrow 'Networks' moat. Sky still have good relationships with key content produces across entertainment and sport. If you want to subscribe to this content legally, Sky is the only place to go in NZ. We can speculate until the cows come home whether HBO (for example) will want to go direct with HBO Max in a few years when their current license deal comes to an end - but that would be pure speculation, and my view is that that prospect becomes less appealing in this already saturated and small market.

The other competitive advantage Sky have is their satellite technology (I can hear everyone gasping as I write this - absolute anathema!).
This would be very expensive for a competitor to replicate. And satellite is still the only reliable tech in a country like NZ in terms of being able to broadcast entertainment and live sporting events across the entire country. That is still a selling point, particularly for Sport. NZ Cricket have made a big call going for a streaming-only service - the wrong call in my view, if they are serious about ensuring all NZers have the ability to watch the matches.

Yes, Sky continue to lose satellite subscribers because their pricing is not compelling - but that is easily fixed.

1. Some really good points made and its very true we don't know how popular the new services will be, but I think every parent knows they will have to have Disney because their kids will demand it, their content is a miracle worker with kids and anyone who likes nostalgia will also be signing up since there is a lot of new Disney movies that will only come out on the subscription service only. Apple will get a lot of subscribers because they also have a lot of original content and their cost is by far one of the cheapest. Apple will do to TV what they did to Music and bring cost to an all time low. At the end of the day all these big players having something SKY doesn't have, a lot of money like billions and billions to spend every year on content and thats hard to compete with. If you get a chance look at the shows Amazon Prime is producing, some really amazing content thats rivaling Netflix and HBO, not to mention they have Lord of the Rings series in the future.

2. As internet connections get better international companies will strive to go on their own and the same will happen with HBO. If that time comes Neon will not have any content that is able to compete.
In terms of satellite, I have two word SpaceX & Starlink! Once that comes out SKY will only have a very expensive bunch of equipment that won't be able to compete on cost.

[mistaTea]

1. Some really good points made and its very true we don't know how popular the new services will be, but I think every parent knows they will have to have Disney because their kids will demand it, their content is a miracle worker with kids and anyone who likes nostalgia will also be signing up since there is a lot of new Disney movies that will only come out on the subscription service only. Apple will get a lot of subscribers because they also have a lot of original content and their cost is by far one of the cheapest. Apple will do to TV what they did to Music and bring cost to an all time low. At the end of the day all these big players having something SKY doesn't have, a lot of money like billions and billions to spend every year on content and thats hard to compete with. If you get a chance look at the shows Amazon Prime is producing, some really amazing content thats rivaling Netflix and HBO, not to mention they have Lord of the Rings series in the future.

2. As internet connections get better international companies will strive to go on their own and the same will happen with HBO. If that time comes Neon will not have any content that is able to compete.
In terms of satellite, I have two word SpaceX and Starlink! Once that comes out SKY will only have a very expensive bunch of equipment that won't be able to compete on cost.

Agreed Disney should get a decent subscription base since it will be cheap and parents will love it for all the reasons you mention (nostalgia, kids demanding it etc). Though I see Disney as a complement to their Sky entertainment and sport content, not a replacement.

We could speculate all day on how this pans out, but ultimately we will just need to wait and see. My view is that there is still room for an aggregator like Sky, and those claiming they will have zero meaningful content to distribute in a few years are scaremongering.

Re: Starlink...now that will be an amazing technological development indeed, and wonderful for all communities across the entire globe who either don't have internet at all, or very poor internet connections. I look forward to it.

With a little luck, by then Sky will be very advanced in their transition to streaming services. Given the rate of satellite subscription declines, they almost certainly will have transitioned by then.

And remember, it is still yet to be seen what upgrades are going to be made to NEON. Hopefully something will be announced at the AGM - I know the team are working on NEON.

If I could be allowed to speculate for a moment, I imagine they will rebrand NEON (Sky TV NOW???). Lots of people don't even realise NEON is owned by Sky (maybe a good thing - ha ha). They also have the opportunity to start adding new 'add-on' packages to their streamed content.

So, $13.95 for Movies + Box Sets... but for another $4.99 you could add a package that includes History Channel and Nat Geo content ON DEMAND. Or for another $2.99 add UK TV content etc.

The possibilities are vast, and if they structure their pricing and add-ons in the right way they could easily up sell subscriptions to the value of $20-$30 per month.

[steveb]

Fewer and fewer people are rocking up to watch Super rugby,does this mean they are watching on Sky instead? No I don't think so (but I could be wrong).I gave up on Super Rugby a couple of years ago,(mainly because auckland were not doing well).

Sky do seem to want to pin their hopes on a waning competition,I hope they have got it right,but as they say "interesting times ahead"

[silverblizzard888]

Agreed Disney should get a decent subscription base since it will be cheap and parents will love it for all the reasons you mention (nostalgia, kids demanding it etc). Though I see Disney as a complement to their Sky entertainment and sport content, not a replacement.

We could speculate all day on how this pans out, but ultimately we will just need to wait and see. My view is that there is still room for an aggregator like Sky, and those claiming they will have zero meaningful content to distribute in a few years are scaremongering.

Re: Starlink...now that will be an amazing technological development indeed, and wonderful for all communities across the entire globe who either don't have internet at all, or very poor internet connections. I look forward to it.

With a little luck, by then Sky will be very advanced in their transition to streaming services. Given the rate of satellite subscription declines, they almost certainly will have transitioned by then.

And remember, it is still yet to be seen what upgrades are going to be made to NEON. Hopefully something will be announced at the AGM - I know the team are working on NEON.

If I could be allowed to speculate for a moment, I imagine they will rebrand NEON (Sky TV NOW???). Lots of people don't even realise NEON is owned by Sky (maybe a good thing - ha ha). They also have the opportunity to start adding new 'add-on' packages to their streamed content.

So, $13.95 for Movies + Box Sets... but for another $4.99 you could add a package that includes History Channel and Nat Geo content ON DEMAND. Or for another $2.99 add UK TV content etc.

The possibilities are vast, and if they structure their pricing and add-ons in the right way they could easily up sell subscriptions to the value of $20-$30 per month.

It would depend on the amount of disposal income a family has, but that is true if the family loves their sports they will likely have both, while families who aren't too fused about sports will probably have them as a replacement. The real question is how die hard are NZ sport fans? Given Spark Sports is also doing the Premier League that could well be what takes a majority of customers away from SKY's vital base. We will find out in a years time since I believe the next 12-24 months will show whether SKY can't actually handle the massive disruption coming its way.

Starlink will become what AWS is to cloud storage right now, it is likely SKY will be a customer of SpaceX, so as much as I don't see them having an advantage once that comes out, I don't seem them being disadvantaged either, which is why for me its all about the content they can put together at the end of the day and Sports is really the only unique play for them. If I were them I'd try to hit new areas like E-sports and trying to get more original Kiwi content by funding some now, build a better moat now based off future demand or die in the future based on current demand.

Why not call it Neon Sky =P

It will be a interesting area to watch, I definitely don't see this being an easy area to be in and there probably is still at least a couple of good cashflow years to come before anything gets heavily dismantled. I won't be buying SKY stock any time soon, but I always like watching how these things pan out. Well I'd also like to say Thank you for the constructive discussion and the open mindedness , especially how civil it has remained! =)

[mistaTea]

Fewer and fewer people are rocking up to watch Super rugby,does this mean they are watching on Sky instead? No I don't think so (but I could be wrong).I gave up on Super Rugby a couple of years ago,(mainly because auckland were not doing well).

Sky do seem to want to pin their hopes on a waning competition,I hope they have got it right,but as they say "interesting times ahead"

I keep hearing claims that hardly anyone watches rugby anymore, and I just don't buy it.

It is true that match attendance has dropped a lot, but big matches are still pulling in large crowds on Sky across the country. It can be expensive going to a live match by the time you get ripped off buying food and drinks...much cheaper to watch on Sky, and you actually see more of the game with commentary etc. Loads of people prefer to get 'the boys' round for a few brews and watch on their 70 inch flat screen at home.

Personally I love Super Rugby. And even though I live in Auckland, I don't just watch the Auckland matches. I enjoy watching all of the teams play, as they are all professionals playing at a high level - and each match is entertaining imo. For $39.99, even if all I watched was Rugby it works out very cheap. By the time you add in all the NRL, tennis, netball etc...the cost to watch is miniscule really.

Charlie Munger is renowned for advising that people should "Invert! Always invert!". Rugby is still the largest sport in NZ...and if we invert the argument, what would everyone be saying if Sky lost NZ Rugby to Spark? You better believe the SP would crash to 50 cents within half an hour and people would be saying "Ohhhh my God! How could Sky lose the rugby of all things? It's only the most popular sport in NZ! Christ, they should have paid up - they should have even issued shares in the company if need be!".

I am amused that on Sharetrader and in the media...literally no matter what Sky TV do...they get nailed for it.

[tga_trader]

add a package that includes History Channel and Nat Geo content ON DEMAND.

Nat Geo is part of Disney+. I know Sky has announced that they're losing the Disney channel, but have they made any announcement about Nat Geo?
Disney also owns 50% of History Channel, but more interestingly 80% of ESPN. So if they really wanted to centralise everything they own into one location it would take a big amount of Skys (and Sparks for that matter) content. The initial Disney plus offering of Disney, Pixar, Marvel, Lucas and NatGeo may be just the beginning.

https://www.titlemax.com/discovery-center/money-finance/companies-disney-owns-worldwide/

[fungus pudding]

Net subscriber numbers increased last year. And the next round of results will include RugbyPass subscribers.

I expect satellite subscriptions to be down, but NEON, Sky Sport NOW, Vodafone TV and RugbyPass subscriptions to be up - generating an overall subscriber gain.

ARPU will be lower of course, but I don't really care about that. I would rather have 1 million subscribers paying an average of $50 than 500,000 subscribers paying an average if $100 (even though Revenue is the same).

In fact, I wish they wouldn't even quote ARPU anymore. It is becoming more meaningless as time goes on.

Take me, for example. I pay $39.99 for Sky Sport NOW and $13.95 for NEON. I am one household who pays Sky $54.94 per month. But under the ARPU model I am seen as two subscribers paying $27.47 each on average.

As the trend of people ditching satellite in favour of NEON/Sky Sport NOW combinations continue the ARPU figure will become even more meaningless in my view.

How does Neon compare with Netflix for available movies etc?

[Bobdn]

How does Neon compare with Netflix for available movies etc?

Not the volume of movies but all new release movies, so for me that's better. If you miss the movie at the movies, it will be on Neon soon enough.

I did take the unusual step to leave my house the other day to watch Joker at the movies...

[tga_trader]

How does Neon compare with Netflix for available movies etc?
Much more recent movies, but quite limited selection. Worth getting a subscription for a month, watching everything you want, and then cancelling, but not something I would bother being a permanent subscriber to.

[Bobdn]

...but there is a wide selection of recently released movies.

Yes, just get it for a month and watch the entire back catalogue of everything HBO has produced, but only their quality shows ;)

I never did watch The Wire the first time around, I guess I should take a gander.

[mistaTea]

Well I'd also like to say Thank you for the constructive discussion and the open mindedness , especially how civil it has remained! =)

My pleasure, always nice to get new information from others, as way as alternative view points.

Would be very sad indeed if we couldn't have a discussion like this without being at each others throats!

[RGR367]

I don't know and I'm not sure but something is not right about this deal between SKT and RNZ and a lot of questions has to be asked for it to pass as above board.

[winner69]

Brent Impey NZ Rugby Chairman is well connected in media and financial circles

[mistaTea]

I don't know and I'm not sure but something is not right about this deal between SKT and RNZ and a lot of questions has to be asked for it to pass as above board.

The move has certainly caught everyone on the hop, and has shown Sky and NZR have the ability to think outside the square in my view.

I don't see anything wrong with NZR owning a piece of a broadcaster. It makes sense, as it enables them to have more say in what Sky TV does moving forward to help nurture and grow the game. At the same time, it gives Sky more certainty about the content moving forward.

Since we are in the era of Peak Content where there are so many OTT SVOD services, maintaining key relationships is more important now than it ever has been for Sky.

[mistaTea]

Over 11 million shares traded today. Someone is buying up large.

I still do wonder if someone is going to launch a takeover attempt. Would be sad to see another company disappear from the NZX. Though I could understand from Sky's perspective, the right owner could make things a lot easier. If the company was private they would not have anywhere near the same amount of scrutiny - they could just get on with it.

Though I make no predictions in this area, it would not surprise me at all if someone was going to try and buy up to 19.99% at the current low price, and then launch a takeover for the rest via a scheme of arrangement.

I remember Vero did something similar with Tower a couple of years back. It ultimately failed because it was blocked by the Comcom, but the strategy was smart (in their case they managed to effectively stop conglomerate Fairfax from entering the NZ marker by purchasing Tower).

Anyway, let's see what happens.

Has anyone else had a similar thought?

[mistaTea]

Over 11 million shares traded today. Someone is buying up large.



Make that 13 million shares.

[bottomfeeder]

You seem to have positive vibes about this one. I prefer 13 million shares sold today. Someone is selling up large.

[mistaTea]

You seem to have positive vibes about this one. I prefer 13 million shares sold today. Someone is selling up large.

Well, about 5 million shares could possibly be accounted for by speculators who purchased at the record low prices at the end of last week. Nice quick 20% return in a day or so - not bad at all if day trading is your game.

As for the others, you are dead right - it is always fascinating to consider who is the buyer and who is the seller. What would motivate each different perspective?

I must admit, when I try tell the sellers story I am at a loss. It has been widely reported that winning the rugby would be crucial for Sky. And the way the deal seems to have been structured, it has the potential to be a win-win for Sky and NZR in the long term.

How this announcement would 'spook' so many investors into dumping their shares at $1.05 - $1.07 (when they could have just sold them weeks ago for $1.11 - $1.15 if they no longer liked Sky as an investment) is baffling.

Winning the rugby and securing a long-term partner as an equity owner is bad news in their eyes I have to assume?

[waikare]

Much more recent movies, but quite limited selection. Worth getting a subscription for a month, watching everything you want, and then cancelling, but not something I would bother being a permanent subscriber to.

It's reasonable value at $13.95 a month, I use as a back up when there is little else on to watch.

[moimoi]

Perhaps NZR will now stand in the market for an additional 5.1% of SKY shares (whoops sorry those don't happen anymore.... I should say obtain 5.1% in a convoluted and non transparent deal with an investment bank) in order to protect its gifted "investment" in SKY from cheap takeover at all time low prices. (thereby retaining influence on its "revolutionary broadcast deal"...blah blah blah..**insert corporate marketing dept waffle**)

No price given for the gifted 5%.

Perhaps with the increased clarity on its next 5 years of revenue SKY will, on the 2nd of November, reinstate the dividend, ensuring a spectacular windfall on NZR's gifted share holding.

[Bobdn]

I did think the share price overacted a bit with the loss of domestic cricket to Spark. I'm a huge cricket fan and I'll miss watching the odd domestic test or 1-dayer via Sky but these days the things I look forward to most are the Big Bash and IPL. And of course its the t20 world cup next year in Aus. Sounds like Spark paid a bundle for NZ domestic cricket. I tried watching the NZ Super Smash but it was very amateurish.

[mistaTea]

Perhaps NZR will now stand in the market for an additional 5.1% of SKY shares (whoops sorry those don't happen anymore.... I should say obtain 5.1% in a convoluted and non transparent deal with an investment bank) in order to protect its gifted "investment" in SKY from cheap takeover at all time low prices. (thereby retaining influence on its "revolutionary broadcast deal"...blah blah blah..**insert corporate marketing dept waffle**)

No price given for the gifted 5%.

Perhaps with the increased clarity on its next 5 years of revenue SKY will, on the 2nd of November, reinstate the dividend, ensuring a spectacular windfall on NZR's gifted share holding.

That is a very interesting thought!

I expect there to be some announcements in the next few days to show which of the big guns are selling and who is vacuuming up the cheap shares.

I find the whole thing just so incredibly fascinating

Even if they paid 5c in dividend every 6 months, that would be about $20 odd million each time. $1M to NZR.

And Sky could easily afford to pay $40M a year in dividends and still retain a large amount of capital to pay down debt and invest in streaming.

[RTM]

I for one wish we could get to the end (ish) position sooner rather than later. Jumping around like "we" are at the moment...SparkSport...SKY ….Neon....Lightbox....Netflix.....AppleTV...YouTub e...well, it adds to tension in our house as some of us get confused as to what when and why !
On top of that....I suspect I am going to in fact pay a little more than I might of for just Sky. I am more discerning however...and sign on for a month or so to watch specific events. e.g. GOT.

[Entrep]

Do they want another 5% if SKY is still around in 5 years?

[mistaTea]

I for one wish we could get to the end (ish) position sooner rather than later. Jumping around like "we" are at the moment...SparkSport...SKY ….Neon....Lightbox....Netflix.....AppleTV...YouTub e...well, it adds to tension in our house as some of us get confused as to what when and why !
On top of that....I suspect I am going to in fact pay a little more than I might of for just Sky. I am more discerning however...and sign on for a month or so to watch specific events. e.g. GOT.

It is entirely possible that, depending on how many servives you subscribe to, you could pay more than the Sky TV bundles.

However, you would still have more flexibility - Sky used to force you to buy Sky Basic for $50 a month before you added Sport or Movies + SOHO.

Platform providers like AppleTV have started introducing the concept of 'Channels' in the US. Essentially, you integrate your content provider (NEON, Netflix, Lightbox etc) and then AppleTV aggregates the content into a single user friendly UI for you to navigate and see what content is available to watch across your subscriptions.

This would certainly lessen the pain of trying to work out what to watch. No idea when AppleTV will make this feature available in NZ.

[jg8512]

It is entirely possible that, depending on how many servives you subscribe to, you could pay more than the Sky TV bundles.

However, you would still have more flexibility - Sky used to force you to buy Sky Basic for $50 a month before you added Sport or Movies + SOHO.

Platform providers like AppleTV have started introducing the concept of 'Channels' in the US. Essentially, you integrate your content provider (NEON, Netflix, Lightbox etc) and then AppleTV aggregates the content into a single user friendly UI for you to navigate and see what content is available to watch across your subscriptions.

This would certainly lessen the pain of trying to work out what to watch. No idea when AppleTV will make this feature available in NZ.

is that what the Vodafone TV box does (for $160)?

[mistaTea]

is that what the Vodafone TV box does (for $160)?

No.

2nd Generation Vodafone TV lets you subscribe to stream Sky TV satellite channels and launch a range of apps (NEON, NETFLIX, Lightbox etc etc).

Does not aggregate all content sources into a convenient UI.

[Sideshow Bob]

Stuff article about different alternatives, including Vodafone TV

https://www.stuff.co.nz/business/opinion-analysis/116569901/with-the-game-changing-should-i-get-rid-of-my-sky-settop-box

Interesting read the comments about different experiences - but Stuff comments can become a mind-wrapping parallel universe that you may not escape with your sanity......

[mistaTea]

Stuff article about different alternatives, including Vodafone TV

https://www.stuff.co.nz/business/opinion-analysis/116569901/with-the-game-changing-should-i-get-rid-of-my-sky-settop-box

Interesting read the comments about different experiences - but Stuff comments can become a mind-wrapping parallel universe that you may not escape with your sanity......

Vodafone TV is definitely a cheaper way of getting traditional Sky TV packages.

This is because Vodafone do not charge a set top box fee if you subscribe as part of their fibre plan. So instead of paying $71 to Sky to get Starter ($25) + Sport ($31 ish) + My Sky (15), you would get the equivalent for $56 per month. Much more reasonable.

Then, because the new generation has NEON - you can just subscribe to NEON for $13.95 a month to get a range of movies and SOHO content (instead of paying $30 to get Sky Movies + SOHO).

Now you don't even have to be a Vodafone fibre customer to get Vodafone TV. You can stay with your current ISP and purchase a VTV box for $179 I believe. When you consider that the MySky rental option is $180 per annum (and no matter how long you rent the box from Sky, you never actually own it) then after 1 year you are already better off. VTV box provides all of the same MySky functionality (pause, rewind, record, series link etc) and actually provides more cloud storage capacity.

I used the 1st Generation VTV. It was really a Beta model. It had limited apps and the UI was a bit clunky. After 12 months I handed it back and have since started using AppleTV (which I love). I believe the latest 2nd Generation VTV boxes are much better though.

If I was going to subscribe to traditional Sky content I would definitely be inclined to go this way and stream it all online instead of signing up with Sky TV directly. Slicker UI and cheaper.

[mistaTea]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12276639

I see another worthless Morningstar rating has been released. Does anyone actually use their value estimates as a basis to make investment decisions?

All the reasons they list to further downgrade the 'fair value' estimate existed before the recent cricket and rugby rights were awarded.

It has been expected for some time that content costs will go up and content will be come more fragmented across multiple platforms (both entertainment and sport).

So why didn't Morningstar factor this in more last time and give an estimate of $1.30 instead of $1.85? Nothing has actually changed since then, except Sky have held on to key rugby rights while also further deepening their relationship with NZR (thereby securing rugby on reasonable terms possibly forever).

Seems to be Morningstar just automatically adjust their value estimates down when the shareprice goes down (and come up with a new story of why this time they are really correct!). Even if nothing has really changed from last time.

I would much rather they stuck to their principles, and only moved fair value estimates up or down once the story of the company actually changes.

[Well Endowed]

So why didn't Morningstar factor this in more last time and give an estimate of $1.30 instead of $1.85? Nothing has actually changed since then, except Sky have held on to key rugby rights while also further deepening their relationship with NZR (thereby securing rugby on reasonable terms possibly forever).


I think the one issue I have with the most recent announcement is that in recent years I feel Rugby has lost its way. The local competition's crowds are poor, participation numbers falling and even corporate sponsorship at a super rugby level is fairly cheap. Outside of the handful of All Blacks games annually which I'd tune into, in my circles (Male in my 30s) I've seen a huge lethargy towards the product being produced in the last few years. With seemingly endless rule changes, Super rugby competition realignment and the volume of meaningless games it's hard to get excited like previous years. I also think the lack of rivalry from across the Tasman has also contributed to this state.

When combining this with the availability and accessibility of other sports (most via streaming) in my mind has meant we've possibly seen the end of the golden years of Rugby. However this doesn't appear to be mirrored in the most recent blockbuster deal. I suspect the threat of spark sport has resulted in an over payment by Sky TV, and I think the NZRU have capitalised on this perfectly. I believe that Spark's mandate will be to proceed to acquire a broad suite of other sports that more accurately reflect the diversity of the NZ viewing public's requirements, made easier now that Sky TV has played most of its trump cards.

I'm not a holder, but watch with interest following the recent announcements. I'd consider buying for a medium term hold at the right price, however I think that price is probably sub 80c (with a market cap of $300m). I wouldn't be surprised to see earnings in the $30-45m mark range in the 2021 calendar year as content rights increases start squeezing margins further and subs continue to trend downwards.

[mistaTea]

I suspect the threat of spark sport has resulted in an over payment by Sky TV, and I think the NZRU have capitalised on this perfectly. I believe that Spark's mandate will be to proceed to acquire a broad suite of other sports that more accurately reflect the diversity of the NZ viewing public's requirements, made easier now that Sky TV has played most of its trump cards.
.

You are not the first to write about this myth - that Sky paid way over the odds for rugby and has now spent all of their money and will not be able to effectively compete for other key rights.

Nobody knows how much Sky has paid, especially since part of the deal was paid in shares. It is not in NZRU’s long term interest to rip the ring right out of it with Sky now that they are an owner of the business as well as a business partner.

This is the genius of the deal - they are both struggling for different reasons. Each partner only succeeds if the other one does. By making NZR an equity holder it further highlights and cements that bond.

Don’t forget, Sky suspended the last dividend - about $30M worth. Even if Sky still agrees to pay $400M cash over 5 years in addition to the new shares (which I highly doubt) then the $30M dividend that was retained alone will have covered most of the extra that needed to be paid. The $20M shortfall ($4M per year over 5 years) is hardly going to knock Sky out of being able to compete for other key rights.

They will lose more rights to Spark, as they definitely won’t be able to win them all. To keep growing though they don’t have to win every single sporting contest - they just have to win most of the key ones. And clearly they will have to be more discerning on which ones they let Spark have and which ones they double down on and make sure they keep.

Perfectly valid points about earnings reducing over time as margins are squeezed. But you must be expecting some incredibly high earning reductions over the next year or so to land on $30-$45M from where they are now.

Though earnings will drop over the next few years, I don’t see that drop being anywhere near what you are predicting.

[jg8512]

No.

2nd Generation Vodafone TV lets you subscribe to stream Sky TV satellite channels and launch a range of apps (NEON, NETFLIX, Lightbox etc etc).

Does not aggregate all content sources into a convenient UI.

Sounds like it does.
https://thespinoff.co.nz/media/02-10-2019/review-vodafone-tv-is-the-last-thing-youll-ever-buy-for-your-television/

[mistaTea]

Sounds like it does.
https://thespinoff.co.nz/media/02-10-2019/review-vodafone-tv-is-the-last-thing-youll-ever-buy-for-your-television/

Dude. No it does not offer ‘Channel’ functionality like AppleTV does in the USA.

Trust me.

It allows you to stream Sky TV’s linear channels. It also allows you to launch a range of different apps (NEON, Netflix, Lightbox etc).

But nowhere does a VTV allow you to surface all of Sky, Netflix, Lightbox etc content into a single UI.

You still have to go hunting for the content you want by surfing each linear channel or opening each app you subscribe to (like you would on your phone).

[moimoi]

""Nobody knows how much Sky has paid..""

I suggest this is unlikely. I'd bet a ticket in Wednesdays lotto draw that Spark Sport (and other industry players) knows exactly how much was paid for the rugby rights. They're paid to know. Information asymmetry, granted, mushrooms @ the bottom reading the Herald and Sharetrader won't know.

In 5 years the value of SKY's equity has collapsed from $6.50 a share to 85 cents and the company has twice now in 2 months dished out equity at all time low prices. This is a woeful outcome for existing equity holders, crushed by the decline in the share price and now being diluted out of existence with issuance.

In the current environment debt is very very cheap but equity is expensive. Take advantage of record low financing rates to borrow the funds to buy rights.

Will any transparency eminate from Thursday's AGM. Unlikely. Tough to "invest" going forward as a retail investor when zero transparency is provided.

GLTA.

[mistaTea]

Issuing new shares to fund an acquisition only ever makes sense if you are gaining at least as much value as you are giving.

In the long term, I believe this will hold true for both the RugbyPass and NZ Rugby deals.

[GR8DAY]

You are not the first to write about this myth - that Sky paid way over the odds for rugby and has now spent all of their money and will not be able to effectively compete for other key rights.

Nobody knows how much Sky has paid, especially since part of the deal was paid in shares. It is not in NZRU’s long term interest to rip the ring right out of it with Sky now that they are an owner of the business as well as a business partner.

This is the genius of the deal - they are both struggling for different reasons. Each partner only succeeds if the other one does. By making NZR an equity holder it further highlights and cements that bond.

Don’t forget, Sky suspended the last dividend - about $30M worth. Even if Sky still agrees to pay $400M cash over 5 years in addition to the new shares (which I highly doubt) then the $30M dividend that was retained alone will have covered most of the extra that needed to be paid. The $20M shortfall ($4M per year over 5 years) is hardly going to knock Sky out of being able to compete for other key rights.

They will lose more rights to Spark, as they definitely won’t be able to win them all. To keep growing though they don’t have to win every single sporting contest - they just have to win most of the key ones. And clearly they will have to be more discerning on which ones they let Spark have and which ones they double down on and make sure they keep.

Perfectly valid points about earnings reducing over time as margins are squeezed. But you must be expecting some incredibly high earning reductions over the next year or so to land on $30-$45M from where they are now.

Though earnings will drop over the next few years, I don’t see that drop being anywhere near what you are predicting.

...........very well explained MrT, good to know someone has got a handle on all this. Agree it sounds like the ultimate win/win scenario with both parties (SKY/NZR) needing each other for this to succeed individually and jointly. WAtching closely.

[mistaTea]

Looking forward to the AGM tomorrow - should hopefully be more detail on the new streaming services they are currently working on.

We know they are revamping NEON (way overdue - even though they have made improvements recently, from a usability perspective it is way behind Netflix).

But I also wonder if Sky GO is going to be a big part of the future. Sky GO has improved a lot as a platform.

Why not allow people subscribe to Sky TV bundles on Sky GO? Create apps on all the main platforms (AppleTV, Vodafone TV etc) and also allow customers to Chromecast to the big screen.

Restrict it to one stream at a time (just like Spark Sport and Sky Sport NOW) so that you avoid the whole password sharing issue. Pay extra for an additional streaming license (just how you would pay more if you wanted a second MySky decoder in the bedroom).

Would be a much cheaper entry point for people who are happy with their Sky bundles, but are put off by satellite pricing.

Just an idea.

[LAC]

Sure to see Sky hunt for new revenue streams at some point soon, the new CEO isnt messing around with the competition and isnt afraid to use equity in the short term for long term gain. I really think Spark or the likes are going to see Sky fighting for a place at the table.

[mistaTea]

20 million shares purchased in 2.5 days...

I want to know which of the big guys are dumping and who is buying.

Sweet Jesus, please don't let this be the beginning of a takeover.

If some big overseas outfit (like NBC) end up getting Sky, I think NZ will regret it. The company certainly needed a big kick up the ass, and have taken the notion of putting the customer first more seriously over the last year...

But right now it is still the largest kiwi media company we have. Would be a sad day if it was delisted imo and all future profits went to an American conglomerate (for example).

However, that's the world we live in. The constant barrage of negative media stories (some heavily biased by the likes of Chris Keall) have all contributed to the overall negative sentiment about the company. This then has contributed to the share price crashing down to levels that are completely divorced from reality and the underlying earnings fundamentals of the business.

This then makes it like stealing candy from a baby for overseas companies on the hunt for a bargain.

[winner69]

Wonder if Brent Impey is playing a role in this other than being Chair of NZ Rugby?

Very well connected gentleman

[mistaTea]

https://www.stuff.co.nz/business/116614788/nz-cricket-says-sky-would-not-know-the-price-spark-paid-for-rights

Looks like Sky put in a very strong bid - a bid that went beyond the limit it feels NZ Cricket was actually worth.

So Spark must have paid a huge sum indeed. I am sure how much they paid will eventually be leaked.

Makes much more sense now when I consider the $200M wiped off their market cap straight after the deal was announced. Institutional investors must have had a reasonable idea how much money they paid to get the rights off Sky - and did not like it.

Given Spark Sport will have a budget from their parent company Spark, the more they pay way over the odds for each deal, the easier it makes it for Sky to hold on to crucial deals.

Any suggestion that Spark Sport have deeper pockets than Sky (due to their rich parent) is mistaken.

[Well Endowed]

so you're suggesting Sky got a bargain for the Rugby and Spark got ripped off for the Cricket?

[mistaTea]

so you're suggesting Sky got a bargain for the Rugby and Spark got ripped off for the Cricket?

Sorry, I do realise that I am a bit thick mate - you'll need to point me to the previous post I made which says (or suggested) that. I can't find it.

I have said that I believe the current rugby deal between Sky and NZR is likely to be a win-win in the long term. I believe it was NZR who put the equity stake part of the deal on the table, but it shows both parties accept reality and are able to think outside the square. When Sky does well, NZR will do well (increased dividends, increased value of shares etc). When NZR does well, Sky will do well (growing fan base generating increased subscriptions to Sky Sport etc). NZR is less likely to put the screws on Sky (now and into the future) for every cent they can get out of them now that they have deepened their relationship as it would hurt them both.

That is not at all the same as saying I think Sky 'got a bargain' on the current rugby deal. I hope you can see the difference.

I have not said that Spark 'got ripped off' either. I have said that they will have paid over the odds to secure the cricket rights (just like they did for the RWC). Paying over the odds will probably still be seen as a 'good deal' to Spark Sport, I'm sure. They are trying to build a loyal subscription base, and they won't be able to do that unless they are able to win key rights from Sky. As Sky are motivated to hold on to as much sport as they can, Spark must by definition pay more money than each contract is worth to get it. Whether it is sustainable and works out for them in the long term is yet to be seen - not all of their investors are convinced. However they are clearly in it to win it, and I am sure they will be around for some time.

That analysis is not at all the same as me saying "Spark just got ripped off for the cricket".

[Entrep]

mistaTea you mentioned you are meeting the CEO this week or next? Are you an analyst or working at Sky?

[mistaTea]

mistaTea you mentioned you are meeting the CEO this week or next? Are you an analyst or working at Sky?

Neither. Just a regular old retail investor.

But I am going to attend the AGM tomorrow, and will get to talk to him there.

[winner69]

Quite a lot of dilution going on here

A few months ago 5% plus new shares to RugbyPass and now another 5% to NZR

[Balance]

Quite a lot of dilution going on here

A few months ago 5% plus new shares to RugbyPass and now another 5% to NZR

Alternative of raising new capital from shareholders does not look attractive either?

[RTM]

Netflix says competition's OK in a growing streaming pie
https://seekingalpha.com/news/3506362

Some may be interested in the Netflix perspective.

[mistaTea]

Attended the AGM today. Overall, they just reiterated what has already been reported (as to be expected, given they are a publicly listed company).

Had a great opportunity to discuss some issues with Martin one-on one. I already had a good feeling about him before, but now having met the man - I can absolutely say that he is the right man for the job.

I won't fully detail our private conversation here. However I can say that I did raise the fact that satellite pricing is not competitive, and is not helped by adding outrageous MySky fees etc. I gave a few different angles on how to view just how scandelous this charge (as one example) is, he smiled to himself and declared to the CFO and Marketing boss - "I like him!". He shares a lot of the same frustrations and views that I do, and there are going to be some big changes happening. I feel a bromance coming on between he and I.

After he left, I thought that was it. But no, he just went to grab the new Chairman of the Board and brought him back to continue the discussion with me. And so we did. It was incredibly interesting and thought-provoking.

Glad I made the effort to attend.

[Sideshow Bob]

Good sign that he goes to spend the time talking to individual investors.

[RTM]

Attended the AGM today. Overall, they just reiterated what has already been reported (as to be expected, given they are a publicly listed company).

Had a great opportunity to discuss some issues with Martin one-on one. I already had a good feeling about him before, but now having met the man - I can absolutely say that he is the right man for the job.


I won't fully detail our private conversation here. However I can say that I did raise the fact that satellite pricing is not competitive, and is not helped by adding outrageous MySky fees etc. I gave a few different angles on how to view just how scandelous this charge (as one example) is, he smiled to himself and declared to the CFO and Marketing boss - "I like him!". He shares a lot of the same frustrations and views that I do, and there are going to be some big changes happening. I feel a bromance coming on between he and I.

After he left, I thought that was it. But no, he just went to grab the new Chairman of the Board and brought him back to continue the discussion with me. And so we did. It was incredibly interesting and thought-provoking.

Glad I made the effort to attend.

Are you going to NZO meeting ?...will be interesting to compare your reception !

[Lola]

Attended the AGM today. Overall, they just reiterated what has already been reported (as to be expected, given they are a publicly listed company).

Had a great opportunity to discuss some issues with Martin one-on one. I already had a good feeling about him before, but now having met the man - I can absolutely say that he is the right man for the job.

I won't fully detail our private conversation here. However I can say that I did raise the fact that satellite pricing is not competitive, and is not helped by adding outrageous MySky fees etc. I gave a few different angles on how to view just how scandelous this charge (as one example) is, he smiled to himself and declared to the CFO and Marketing boss - "I like him!". He shares a lot of the same frustrations and views that I do, and there are going to be some big changes happening. I feel a bromance coming on between he and I.

After he left, I thought that was it. But no, he just went to grab the new Chairman of the Board and brought him back to continue the discussion with me. And so we did. It was incredibly interesting and thought-provoking.

Glad I made the effort to attend.

Sounds good , thank you....did he indicate any Board changes asap.? One in particular.

[mistaTea]

Are you going to NZO meeting ?...will be interesting to compare your reception !

Ha! No I am not attending that circus.

I doubt any of management or the Board will be declaring "I like him!" with reference to me any time soon!

[Leftfield]

Thanks for your report mistaTea....... very informative.

[Sideshow Bob]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12277295

[mistaTea]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12277521

That is a large chunk of shares voting against Martin's 800,000 share reward as part of his remuneration. Though it was strongly voted in favour for him to stay on the board.

Some investors firing a warning shot I suppose - they want to see results in a reasonable timeframe.

Personally I voted for his share allocation. Pay the man - it might not be reflected in the SP right now, but he really is doing a lot in a short period of time in my view. Plus it is more likely to align his interests with mine if he has a reasonable equity stake.

And turning a business around won't happen over night. Hold Management accountable, absolutely - but I also think investors need to have some patience.

[mistaTea]

In other news, I can't wait to see the revamped NEON and whatever the brand new service is that will allow you to stream Sky TV channels.

I imagine the latter will be Sky GO on steroids.

Then I will have a decision to make:

1. Do I keep going with Sky Sport NOW and a revamped (and probably rebranded) NEON ($54/month in total); or
2. Is a traditional SkyTV bundle more attractive in terms of usability and price now that they have an app for it?

I do miss UKTV, History Channel sometimes. Not enough to pay a small fortune to have a satellite subscription mind you, but I would definitely take a look if they offered a cheaper (relative to satellite pricing) streaming service.

Oh and a chap I was talking to who is deep in the NEON work promised me they definitely are working with Apple right now to get the upgraded version on AppleTV. Thank Christ for that.

[winner69]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12277521

That is a large chunk of shares voting against Martin's 800,000 share reward as part of his remuneration. Though it was strongly voted in favour for him to stay on the board.

Some investors firing a warning shot I suppose - they want to see results in a reasonable timeframe.

Personally I voted for his share allocation. Pay the man - it might not be reflected in the SP right now, but he really is doing a lot in a short period of time in my view. Plus it is more likely to align his interests with mine if he has a reasonable equity stake.

And turning a business around won't happen over night. Hold Management accountable, absolutely - but I also think investors need to have some patience.

Aren’t those shares a reward for staying ....doesn’t have to do anything else if I read it correctly

Seems if they didn’t pass this he would have got rewarded somehow.

[mistaTea]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12277490

Possibly the first balanced article I have ever seen Chris Keall write with regards to Sky.

Will be interesting to see if Sky enter the broadband (and mobile?) market directly...or find some other way to tighten their partnership with other providers and offer competitive bundles.

I still think Vodafone are charging too much for their bundles. They don't charge a set-top box fee (and now you can buy their VTV box outright for a one-off $179)... however if you want Sky Starter + Sport... you are still effectively paying about $56 for the Sky component.

That is what you would pay today as a Sky customer if they waived the MySky fee.

Yet Vodafone get wholesale prices from Sky. I would have thought they would start by offering Sky channels to their customers at cost as a way of making their broadband packages more attractive than Spark's to try and grow that business. Hell, maybe even offer it below cost initially to pinch a lot of broadband business from their competitors. Then review the Sky pricing component over time.

[mistaTea]

Taking my investor hat off for a moment, and replacing it with my speculator hat... (because, let's face it, it can be fun).

Philip Bowman did make an interesting comment at the AGM when the topic of takeovers/mergers and partnerships came up. He largely side-stepped the topic but did say that he hoped the Commerce Commission would think very carefully about future decisions they make, given this industry and technology etc is changing rapidly etc.

It did get me to thinking...

So, Sky have already got a wholesale agreement with Vodafone. Sky have also confirmed that they are involved in discussions with other players (telcos and power companies) with a view to offering them wholesale deals/partnerships too.

Vocus is one such player. Vocus offer their own wholesale pricing for their broadband/fibre networks. They also trade under the brands Orcon and Slingshot. Both of these brands bundle telco services with power.

So, two possible options spring to mind.

1. Sky enter into a wholesale agreement with Vocus to access their network, and go into the broadband market themselves. Sky in turn offers wholesale pricing for their Sky content so that Orcon and Slingshot can bundle that in with their telco and power offers. This would be a difficult path for Sky as it would be hard to see how their offering would be more compelling than Orcon and Slingshot given they are able to bundle electricity in with their deal too. Still, it is an option to diversify revenue streams.

2. Vocus purchases Sky TV. In the purchase agreement they provide ironclad assurances that Sky TV will continue to offer competitive wholesale rates to other players (just like how Vocus trade under their own brands but also wholesale their network to others). This enables Vocus Group to offer best in market bundles, while also removing any hurdles that might be presented when the Comcom review the deal.

What do other Sharetraders think? Is what I have described above feasible or just La La Land?

[ScrappyO]

Maybe IFT should buy Sky TV. It would be interesting to see if the commerce commission would allow it.

[mistaTea]

Maybe IFT should buy Sky TV. It would be interesting to see if the commerce commission would allow it.

Would make sense since the Vodafone-Sky synergies still exist.

So long as air tight (legally binding?) assurances that Sky will continue to offer wholesale rates to other companies, then I think it would be hard for the comcom to block it.

It was a 50/50 call last time, and things are different now that Spark have entered the sport arena so aggressively.

[blackcap]

Would make sense since the Vodafone-Sky synergies still exist.

So long as air tight (legally binding?) assurances that Sky will continue to offer wholesale rates to other companies, then I think it would be hard for the comcom to block it.

It was a 50/50 call last time, and things are different now that Spark have entered the sport arena so aggressively.

I picked up a few on Friday for the very reason that things seem to be moving rather quickly in the streaming/sport/entertainment space and some consolidation may be on the cards in the near future.

[mistaTea]

I picked up a few on Friday for the very reason that things seem to be moving rather quickly in the streaming/sport/entertainment space and some consolidation may be on the cards in the near future.

Maybe Infratil and Vocus can duke it out for ownership - shareholders might then get a halfway decent price for their shares.

One investor referred to us as "sitting ducks" right now (she was giving the new Chairman a bit of a rev up, and warned him not to give the company away for pennies on the dollar just because the SP is so low right now).

[Lola]

Maybe Infratil and Vocus can duke it out for ownership - shareholders might then get a halfway decent price for their shares.

One investor referred to us as "sitting ducks" right now (she was giving the new Chairman a bit of a rev up, and warned him not to give the company away for pennies on the dollar just because the SP is so low right now).

We might get a bit of a steer on these sorts of angles when the SSNs are posted resulting from last weeks large turnover volumes.

[mistaTea]

We might get a bit of a steer on these sorts of angles when the SSNs are posted resulting from last weeks large turnover volumes.

Yes, I think there should be some announcements this week.

Damn near 30 million shares were traded last week (about 7% of total shares outstanding).

[mistaTea]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SKT/343012/310240.pdf

Great news.

Now if they can hang on to the NRL, they will be in a very strong position.

[blackcap]

Yes, I think there should be some announcements this week.

Damn near 30 million shares were traded last week (about 7% of total shares outstanding).

Yes I too wonder how has been bailing and who has entered. Good news this morning about the netball. (Not a sport I watch but my mom etc does)

[mistaTea]

Yes I too wonder how has been bailing and who has entered. Good news this morning about the netball. (Not a sport I watch but my mom etc does)

Tbh, I would have expected some announcements to be made by now. I would have expected one large institution to have mopped up a large chunk of the 30 million shares.

[mistaTea]

I have asked the NZX surveillance team to take a look at this (massive trading volumes in a short period of time, yet still no disclosures).

I can't imagine the 30 million shares traded in a week were mostly done by smaller retail shareholders (thereby not warranting any disclosures).

But let's see what the NZX come back with.

[Lola]

i have asked the nzx surveillance team to take a look at this (massive trading volumes in a short period of time, yet still no disclosures).

I can't imagine the 30 million shares traded in a week were mostly done by smaller retail shareholders (thereby not warranting any disclosures).

But let's see what the nzx come back with.

good on you for enquiring. If i had to guess id say the acc will be in the mix .

[moimoi]

I have asked the NZX surveillance team to take a look at this (massive trading volumes in a short period of time, yet still no disclosures).

I can't imagine the 30 million shares traded in a week were mostly done by smaller retail shareholders (thereby not warranting any disclosures).

But let's see what the NZX come back with.

Possibly you'll find that this seemingly large volume is illusionary. Market structure and associated algorithmic trading enables appropriately resourced market participants to be both buying and selling stock while say accumulating a position. You can see it on various SSH notices whereby an entitiy may have bought 9m shares but concurrently has sold 8m for a net gain of 1m. The net gain of 1m may not be enough to trigger a disclosure, while it appears there has been significant volume.

[winner69]

Possibly you'll find that this seemingly large volume is illusionary. Market structure and associated algorithmic trading enables appropriately resourced market participants to be both buying and selling stock while say accumulating a position. You can see it on various SSH notices whereby an entitiy may have bought 9m shares but concurrently has sold 8m for a net gain of 1m. The net gain of 1m may not be enough to trigger a disclosure, while it appears there has been significant volume.

Churn is a real consideration, esp in volatile times.

[winner69]

I think the timing when disclosures have to be made go along the lines of as soon as one knows or ought reasonably to know.

So maybe there aren’t any new SSH and none have ceased to be SSH and no current SSH has gone +/-1%

But then tomorrow another day

[winner69]

Still no SSH

So all those zillions of shares just churned by the instos

No ‘corporate’ activity?

[Lola]

Still no SSH

So all those zillions of shares just churned by the instos

No ‘corporate’ activity?

Perhaps some idiots are confused and think its SKT thats been having the giant BBQ this week.

[mistaTea]

Still no SSH

So all those zillions of shares just churned by the instos

No ‘corporate’ activity?

After my initial email to the NZX I did receive a reply saying my email had been forwarded on to their "surveillance team".

Still haven't heard anything back - but it does seem weird to me that not a single disclosure has been made after such a large amount of shares traded hands.

Maybe it was the cyborgs selling and then quickly buying, thereby not actually changing the ownership structure at all?

[Lola]

After my initial email to the NZX I did receive a reply saying my email had been forwarded on to their "surveillance team".

Still haven't heard anything back - but it does seem weird to me that not a single disclosure has been made after such a large amount of shares traded hands.

Maybe it was the cyborgs selling and then quickly buying, thereby not actually changing the ownership structure at all?

Sure as hell it wasnt that waste of space , Sharesies. When will they fiter those trival time wasting daily announcements off the Announcement page? Cant be that hard. Maybe they could consult Peter Beck.

[Cobber]

One has to wonder if Sky has overpaid for those rugby rights now. New coach, new captains, new players.... this could be a rebuild for a few years.

[Jay]

Everyone will want to watch to see how they go!

Did have a thought in the back of my mind that a 3 peat would be a big hurdle to climb and so it was.
Some ways if we don't win next time coach may not be under so much pressure all other things being equal.

[mistaTea]

One has to wonder if Sky has overpaid for those rugby rights now. New coach, new captains, new players.... this could be a rebuild for a few years.

We have bombed out of World Cup Tournament's before, with heads rolling as a result.

New Zealander's still like watching rugby. And the All Blacks are still a wonderful brand. And the international rugby result will not impact those who enjoy watching Super Rugby at all (why would it?).

Good reminder for the country too - though the AB's are an amazing team, there isn't a lot in it now between the top 5 or 6 rugby teams in the world (in terms of technical skill). Ultimately this is fantastic for the sport (even though we are sad our team won't make history by winning the RWC 3 times in a row).

[Entrep]

Not looking good. I was contemplating picking up some last week but held off. Knife catching is a dangerous game and one never ceases to be amazed at what the market can do.

[Cobber]

Not looking good. I was contemplating picking up some last week but held off. Knife catching is a dangerous game and one never ceases to be amazed at what the market can do.

Agreed. The next 12 months will be telling. Lost Disney. Lost cricket. Apple+ launches. The reality is they are fighting for people's time.

Mediaworks Three Now is struggling. TVNZ struggling.

Apart from rugby... what's left??!!

Will subscriptions need to be reduced to maintain numbers? How does that affect revenue?

Falling knife alright.

[Bobdn]

Sky has lost only domestic cricket from April right? All the good stuff is still on Sky for years and years to come - NZ international cricket, Ashes; BBL, T20 World Cup, ODI World Cup, IPL. Sky have lost...the Super Smash (and as an ardent cricket fan, I never watched one game) and other domestic cricket.

I'll sign up for SkySportNow for 12 months on 1 November for $40 per month to watch the England Tour of NZ, everything in between (including BBL and IPL) and T20 world cup in October. And some Olympics if I can be bothered.

[mistaTea]

Sky has lost only domestic cricket from April right? All the good stuff is still on Sky for years and years to come - NZ international cricket, Ashes; BBL, T20 World Cup, ODI World Cup, IPL. Sky have lost...the Super Smash (and as an ardent cricket fan, I never watched one game) and other domestic cricket.

I'll sign up for SkySportNow for 12 months on 1 November for $40 per month to watch the England Tour of NZ, everything in between (including BBL and IPL) and T20 world cup in October. And some Olympics if I can be bothered.

Yes and they still have a lot of entertainment content too.

People focus on sport for some reason. It is important for them to hang on to key sporting content...

But the majority of their subscribers don’t subscribe to Sport. They want the entertainment channels.

They have a contract with HBO that still has a few years to run. Plus a whole range of other channels that people do like to watch.

I believe they are working on a new Sky TV app which would enable you to watch Sky without the need of a set top box. So they will be able to offer cheaper bundles.

With a little luck the new app will have an ON DEMAND focus, with linear as a secondary option.

When that comes out I will consider canceling my NEON and Sky Sport NOW subscriptions in favour of a more comprehensive Sky TV bundle. If the pricing makes sense...

[mistaTea]

Not looking good. I was contemplating picking up some last week but held off. Knife catching is a dangerous game and one never ceases to be amazed at what the market can do.

Not looking good in what sense? The low market value? If you are worried about price movements then definitely do not buy Sky - it is volatile right now.

From an underlying business perspective, nothing really bad has actually happened recently. They held rugby (and had to pay a bit more - but the market knew that would be the case).

They lost NZ cricket but kept all other cricket. So losing NZ cricket in and of itself is unlikely to cause subscription losses.

They did lose Disney - which sucks. But I’m not convinced it will lead to a mass exodus of subscribers. More likely, the consumer will keep Sky if they already have it and subscribe to Disney+ to make sure they have Disney for the kids (assuming CBeebies isn’t a decent enough replacement).
As I say, losing Disney is definitely not great - but I don’t think we should over egg it either.

If you deduct $62M for RugbyPass, the market has valued Sky at $320M. That’s absurd in my view.

Even at a PE of 10, earnings would need to plummet to $32M to justify a market cap like that. I don’t see it (or maybe I don’t want to).

My personal view is that consumers will be looking for good content aggregators again before long. It’s already ridiculous how many different services there are - now Apple TV+ and Disney+ coming into the mix makes it even more so.

If Showtime and HBO cut ties with Sky and came at NZ consumers direct, we would have well and truly entered Nutsville. Our population is small - nowhere near big enough to justify so many seperate services.

[Cobber]

Not looking good in what sense? The low market value? If you are worried about price movements then definitely do not buy Sky - it is volatile right now.

From an underlying business perspective, nothing really bad has actually happened recently. They held rugby (and had to pay a bit more - but the market knew that would be the case).

They lost NZ cricket but kept all other cricket. So losing NZ cricket in and of itself is unlikely to cause subscription losses.

They did lose Disney - which sucks. But I’m not convinced it will lead to a mass exodus of subscribers. More likely, the consumer will keep Sky if they already have it and subscribe to Disney+ to make sure they have Disney for the kids (assuming CBeebies isn’t a decent enough replacement).
As I say, losing Disney is definitely not great - but I don’t think we should over egg it either.

If you deduct $62M for RugbyPass, the market has valued Sky at $320M. That’s absurd in my view.

Even at a PE of 10, earnings would need to plummet to $32M to justify a market cap like that. I don’t see it (or maybe I don’t want to).

My personal view is that consumers will be looking for good content aggregators again before long. It’s already ridiculous how many different services there are - now Apple TV+ and Disney+ coming into the mix makes it even more so.

If Showtime and HBO cut ties with Sky and came at NZ consumers direct, we would have well and truly entered Nutsville. Our population is small - nowhere near big enough to justify so many seperate services.

Sky losing HBO is only a matter of time :

https://www.theverge.com/2019/10/29/20939183/hbo-max-interface-warnermedia-disney-netflix-launch-date-ui-gallery

[Stranger_Danger]

My personal view is that consumers will be looking for good content aggregators again before long. It’s already ridiculous how many different services there are - now Apple TV+ and Disney+ coming into the mix makes it even more so.


Content aggregators are everywhere, just type "torrent sites" or similar into Google.

I agree with your point about the multiple subscriptions getting expensive, but there is a way to have it all at a price point of zero.

I'm not saying it is right, or fair, or moral. But it is real, and it is really hard to compete with zero.

[blackcap]

Content aggregators are everywhere, just type "torrent sites" or similar into Google.

I agree with your point about the multiple subscriptions getting expensive, but there is a way to have it all at a price point of zero.

I'm not saying it is right, or fair, or moral. But it is real, and it is really hard to compete with zero.

That is true. Friends of mine (both professional) have a thing called a Kodi Box? and they get all their sports and all the latest movies for free. The guy works in IT and assures me that it is all legal as he is not providing the content but only consuming it but I am sure its a grey area. The only thing is when watching the ALL Blacks play v SOuth Africa or England you may get a pommy commentary. (Its a SKY UK feed) Initially the box he got was a capital outlay of $300 or thereabouts and that was it. Sky do have that as a competitor.
Also another friend of mine (also a professional) just goes online and finds an availalbe "stream" and watches the rugby that way.
Not sure if I could go to that level on a consistent basis, but I did watch the boxing Parker v a few opponents that way.

[mistaTea]

Sky losing HBO is only a matter of time :

https://www.theverge.com/2019/10/29/20939183/hbo-max-interface-warnermedia-disney-netflix-launch-date-ui-gallery

I don't try to predict what strategic moves other organisations will make in the future (I can't really know what HBO may or may not do, and in what timeframes etc). It is also important not to take a couple of pieces of information, and then extrapolate the results as a certainty.

i.e. Apple TV + launches tomorrow, Disney+ launches later that same month THEREFORE HBO is DEFINTELY going to ditch Sky TV once their existing deal comes to an end.

https://www.digitaltveurope.com/2019/10/29/sky-in-five-year-output-deal-with-hbo/

Sky TV UK has just signed another 5 year deal with HBO, and it seems the two companies are actually deepening their relationship. Just because other companies are 'going it alone' does not automatically mean that HBO will attempt to gain success by following the same path.

Of course, Sky TV NZ aint Sky TV UK (which has broadcast rights across Europe) so neither can we assume that HBO value the Sky NZ relationship in the same way. But we shouldn't jump to 'doom and gloom' scenarios either.

[mistaTea]

That is true. Friends of mine (both professional) have a thing called a Kodi Box? and they get all their sports and all the latest movies for free. The guy works in IT and assures me that it is all legal as he is not providing the content but only consuming it but I am sure its a grey area.

https://www.stuff.co.nz/business/industries/108178655/watching-paytv-for-free-using-kodi-boxes-not-legal

Your friend is deluding himself - Kodi boxes are illegal, and this has gone through the courts now.

And even before it went through court, people damn well knew what they were doing was wrong. On what planet can you pay a one-off $300 fee and then watch unlimited entertainment and sports content for free...forever?

[mistaTea]

Content aggregators are everywhere, just type "torrent sites" or similar into Google.

I agree with your point about the multiple subscriptions getting expensive, but there is a way to have it all at a price point of zero.

I'm not saying it is right, or fair, or moral. But it is real, and it is really hard to compete with zero.

Online piracy, facilitated via torrenting, kodi boxes etc is definitely a big problem for the entire industry (both content aggregators and distributors like Sky, as well as the actual content creators).

And theft is not going away, it is a fact of life unfurtunately.

There are risks with illegally streaming content though (it's not all gravy and people do get burned). However, the only way companies like Sky can combat piracy is to

1. Provide bundles at a reasonable price, rewarding loyalty
2. Enhance Usability across platforms

Even then, there will always be people who will steal no matter what.

[blackcap]

https://www.stuff.co.nz/business/industries/108178655/watching-paytv-for-free-using-kodi-boxes-not-legal

Your friend is deluding himself - Kodi boxes are illegal, and this has gone through the courts now.

And even before it went through court, people damn well knew what they were doing was wrong. On what planet can you pay a one-off $300 fee and then watch unlimited entertainment and sports content for free...forever?

Totally agree with you. We do have a go at him from time to time, I am very uncomfortable with it. But as a society many people have accepted it as "ok" because "sky are just rip offs anyway" and people turn a blind eye.
I was unaware about owning the box being illegal, I may do some searching through the courts. What annoys me too is the same with those that rip off insurance you hurt everyone else. So because he is streaming for free, I pay a larger SKY bill and that is mildly annoying. But I know many people that do have these Kodi boxes and it is an ongoing problem for firms like SKY.

[blackcap]

Even then, there will always be people who will steal no matter what.

Yeah my greenie friend falls in this category. He is a professional (wont say what profession) and loves his rugger and cricket. But he really is poor due to financial mismanagement on his wife's part. (always asking me for a loan to cover stuff like car needing a warrant etc). So he could no way afford a SKY bill. He will stream for life. Has done for the past 10+ years and I do not see anything that will stop him. Unless the courts start imposing large fines for end consumers that get caught streaming illegally.

[mistaTea]

I was unaware about owning the box being illegal

The Kodi box in and of itself is not illegal I don't think.

But they have been sold with pre-installed software that allow users to break geographical boundaries and stream content they are not entitled to stream.

Kind of like VPN's I think - which is a related issue. Chris Keall from The Herald describes VPN's as a 'grey area'. Horse sh1t - it is blatantly wrong. How can me using a VPN to trick the BBC (for example) into thinking I am based in the UK so I can stream their content for free be a 'grey area'?

Found this blog on piracy just before, pretty much sums up my views. There is no way you will ever get rid of theft (people have always found ways to thieve...), but you can significantly reduce the problem by making it easier and a more enjoyable experience to do the right thing: https://www.viaccess-orca.com/blog/six-ways-to-stop-digital-piracy

[mistaTea]

Yeah my greenie friend falls in this category. He is a professional (wont say what profession) and loves his rugger and cricket. But he really is poor due to financial mismanagement on his wife's part. (always asking me for a loan to cover stuff like car needing a warrant etc). So he could no way afford a SKY bill. He will stream for life. Has done for the past 10+ years and I do not see anything that will stop him. Unless the courts start imposing large fines for end consumers that get caught streaming illegally.

Strategies will evolve over time I am sure to reduce the issue. A combination of carrot and stick.

More carrot though - make legally streaming content a 'no brainer'. But human nature being what it is, there probably does need to be some stick too - being poor does not allow me to steal a loaf of bread from my local dairy, and nor does it mean I can aquire enteretainment and sporting content I have not paid for.

I appreciate you are in agreement with me on this. I also have a particular friend of mine who pirates. He used to drive me nuts, because the crazy bs stories he would come out with to further justify why he streams illegally just blew my mind. He had clearly spent a lot of time talking himself into it. He earns great money as an IT contractor though, so it is not about money in his case. He was just a tight arsed thief who thinks of it as a victimless crime (he would not agree that streaming content illegally is the same as stealing a loaf of bread).

Anyway, I think I did convince him to subscribe to NEON to watch Game of Thrones etc without the moral hazard. So far as I know he still has his subscription...so there is hope.

[mistaTea]

Sky losing HBO is only a matter of time :

https://www.theverge.com/2019/10/29/20939183/hbo-max-interface-warnermedia-disney-netflix-launch-date-ui-gallery

Further to this... I dug out the last announcement from Sky regarding HBO...

https://www.sky.co.nz/-/mk_pressrelease_260318_2

At the end of March 2018 they announced their latest renewal deal with HBO. As these deals go for 5 year periods, Sky will have the rights to broadcast HBO content through to the end of 2023. So they still have about 4 years guaranteed.

Plenty can happen between now and then in this evolving industry - but any notion that HBO is about to drop off Sky TV/NEON screens imminently is scaremongering.

[oldtech]

Strategies will evolve over time I am sure to reduce the issue. A combination of carrot and stick.

More carrot though - make legally streaming content a 'no brainer'. But human nature being what it is, there probably does need to be some stick too - being poor does not allow me to steal a loaf of bread from my local dairy, and nor does it mean I can aquire enteretainment and sporting content I have not paid for.

I appreciate you are in agreement with me on this. I also have a particular friend of mine who pirates. He used to drive me nuts, because the crazy bs stories he would come out with to further justify why he streams illegally just blew my mind. He had clearly spent a lot of time talking himself into it. He earns great money as an IT contractor though, so it is not about money in his case. He was just a tight arsed thief who thinks of it as a victimless crime (he would not agree that streaming content illegally is the same as stealing a loaf of bread).

Anyway, I think I did convince him to subscribe to NEON to watch Game of Thrones etc without the moral hazard. So far as I know he still has his subscription...so there is hope.

Piracy has been around for decades in one form or another, in all forms of media. Go back a few decades and think people dubbing music tapes, then moving onto copying CDs and DVDs. I was into computers in the 80s and went to a Thursday night computer meet which I quickly found was almost entirely about people swapping pirated games.

The media and the methods change, people's desire to get something for nothing doesn't.

[mistaTea]

Piracy has been around for decades in one form or another, in all forms of media. Go back a few decades and think people dubbing music tapes, then moving onto copying CDs and DVDs. I was into computers in the 80s and went to a Thursday night computer meet which I quickly found was almost entirely about people swapping pirated games.

The media and the methods change, people's desire to get something for nothing doesn't.

Absolutely right, and the problem will never go away.

Nowadays it is an even bigger problem than people dubbing tapes back in the 80's and 90's.

It is a lot easier to get pirated content these days (you don't even have to be particularly IT savvy) and the quality of a lot of the illegal streams is very good (dubbed tapes could be pretty average a lot of the time from memory - it was a while ago!).

So you never get rid of the issue. But you can significantly dampen it by providing excellent platforms, at a fair price. Couple this with education (I do believe a lot of young folk stream illegally without having even thought about the moral hazard etc) and companies like Sky can still make a decent living.

I think Netflix has shown us this. Almost everyone I know has a Netflix account (I am a subscriber too). I know Netflix content does get pirsated too, but it is much less of an issue for them because most people prefer to use their platform. It is very reasonably priced, and an absolute pleasure to use from a usability perspective.

[Entrep]

No one has mentioned piracy either - that hasn't gone anywhere.

In fact I just looked and a popular SOHO series is showing episode 6 in the US today. That same episode won't play on SKY until next week. They are playing episode 5 this week instead.

Piracy is nothing new and in fact its often easier, more convenient and more timely that trying to pay for it.

Also mistea you mentioned that lots of people get SKY for entertainment also. I don't think that is the case and certainly can't be keeping in terms of trends - all the content makers are moving to their own platforms and other platforms like Youtube etc are only growing. I never used to watch Youtube but since having discovered a few channels I am really into watch a heck of a lot of it.

[Entrep]

I think Netflix has shown us this. Almost everyone I know has a Netflix account (I am a subscriber too). I know Netflix content does get pirsated too, but it is much less of an issue for them because most people prefer to use their platform. It is very reasonably priced, and an absolute pleasure to use from a usability perspective.

Netflix is also a global company with global tech, content delivery and global deals, and they are still making a loss with those economies of scale. Not sure how Sky could possibly hope to compete

[winner69]

Talk of dubbing tapes ...found my pile of Thomas the Tank Engine tapes the other day

Might wrap them up and give to kids for Xmas

[macduffy]

Talk of dubbing tapes ...found my pile of Thomas the Tank Engine tapes the other day

Might wrap them up and give to kids for Xmas

Then what will you do for entertainment, winner?

:p

[mistaTea]

Also mistea you mentioned that lots of people get SKY for entertainment also. I don't think that is the case...

It literally is the case.

Of the almost 800,000 subscribers they have, less than half have Sky Sport.

And many of the subscribers who do have Sport will also have at least one of the entertainment options added too (SOHO, for example).

[blackcap]

It literally is the case.

Of the almost 800,000 subscribers they have, less than half have Sky Sport.

And many of the subscribers who do have Sport will also have at least one of the entertainment options added too (SOHO, for example).

I have it for sport, but for some reason I get SOHO and Soho 2 for free. Not complaining, great service on that front.

[moimoi]

Overnight in the US HBO launched HBO MAX @ US$14.99 a month.

[oldtech]

It literally is the case.

Of the almost 800,000 subscribers they have, less than half have Sky Sport.

And many of the subscribers who do have Sport will also have at least one of the entertainment options added too (SOHO, for example).


Yup, I'm one of those.

Don't have Sky Sports, don't have Movies, and when I looked into getting rid of Sky a while back one of the big sticking points was UK TV. My wife is a big fan of many of the UK programs, and while you can get some of them on other channels or streaming there are enough programs that you can't.

Also my wife likes simplicity - not having to hunt through multiple services to find the program she wants. For her, Sky fits the bill.

[Bobdn]

Overnight in the US HBO launched HBO MAX @ US$14.99 a month.

Wow, that's $23 per month NZD. Neon which gives you new release movies and HBO content (among other stuff of course) is just $14 per month.

[winner69]

Then what will you do for entertainment, winner?

:p

My Little Pony and S Club 7 probably

[mistaTea]

Overnight in the US HBO launched HBO MAX @ US$14.99 a month.

I think they announced that HBO Max will be available from May 2020.

[mistaTea]

Wow, that's $23 per month NZD. Neon which gives you new release movies and HBO content (among other stuff of course) is just $14 per month.

That's right, NEON is ridiculously cheap. People should be praying that HBO, Showtime, FX etc don't decide to have a go at joining the multitude of content providers in our small market by going OTT, and stick with Sky.

If you had to subscribe to all of their services separately, no way are you getting it for $13.95 per month.

Depending on how they go, some of the content providers may still end up doing non-exclusive deals with Sky. In the future Disney, for example, may want to offer their standalone option whilst also letting Sky bundle it with their content.

I imagine Sky would go for it if the price was right, so long as they were the only other entity that could broadcast/stream the content apart from the actual content provider.

Many many options going forward.

[Dlownz]

What's everyone's concensus on sky at the mo. One really bad result with no dividend. Will they return to a reduced dividend in March I'm actually surprised buy the continued drop.

[Balance]

What's everyone's concensus on sky at the mo. One really bad result with no dividend. Will they return to a reduced dividend in March I'm actually surprised buy the continued drop.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SKT/343758/311202.pdf

Only 39m more shares to sell - line up to grab a bargain?

[mistaTea]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SKT/343758/311202.pdf

Only 39m more shares to sell - line up to grab a bargain?

So they dumped 5 million so far, more to come I am sure...

But who was dumping the other 25 million???

[winner69]

So they dumped 5 million so far, more to come I am sure...

But who was dumping the other 25 million???

They have selling down (dumping) all year haven’t they

[Marilyn Munroe]

What's everyone's concensus on sky at the mo. One really bad result with no dividend. Will they return to a reduced dividend in March I'm actually surprised buy the continued drop.

Some beleave SKY is in a no mans land filled with shell holes and mud.

However if you want an outside broadcast unit for a sports event who are you going to call?

Boop boop de do
Marilyn

[mistaTea]

Some beleave SKY is in a no mans land filled with shell holes and mud.

However if you want an outside broadcast unit for a sports event who are you going to call?

Boop boop de do
Marilyn

Yes and the market has severely overreacted.

Ultimately I believe Spark's successful entry into Sport will be their undoing. They were very successful at presenting a strong argument to block the Sky-Vodafone merger.

All of that is out the window now - through partnerships Spark can even produce live sport domestically now. Zero argument possible now that Sky could ever have a stranglehold on live sport now that an $8B company has shown there are very low barriers to entry.

Given Sky is still a very profitable business, and can be a complimentary service to telco, utilities etc...Sky will have much more scope to move forward I believe without worrying so much about the regulators.

Martin Stewart was on his way back from the UK when he signed the rugby deal. I do not believe he was over there on holiday!

One could speculate he was talking to his mates at Sky UK (he worked there before) to either get general advice on how to diversify revenue streams as they have...or something else entirely given Comcast just purchased them.

Best not to speculate too much - but I certainly find the whole thing just so damn fascinating.

[winner69]

So the Commonwealth Games still exist ...where were the last ones?

https://www.nzx.com/announcements/344071

[mistaTea]

So the Commonwealth Games still exist ...where were the last ones?

https://www.nzx.com/announcements/344071

Gold Coast.

[Sideshow Bob]

So the Commonwealth Games still exist ...where were the last ones?

https://www.nzx.com/announcements/344071

Pffffffttttt………..they give us the chance to win lots of medals!

Last ones were on the Goldie. Next ones in Brum.

[mistaTea]

I would have thought a Spark-TVNZ combo would have held on to the rights since TVNZ is the incumbent.

TVNZ recently made comments that they wanted to maintain and expand their existing line up...and Spark are clearly very hungry to grab new content to bolster their offering.

[airedale]

Commonwealth Games. I liken them to a school sports day. Show an interest if your own children are competing, otherwise it is a non-event.

[mistaTea]

Commonwealth Games. I liken them to a school sports day. Show an interest if your own children are competing, otherwise it is a non-event.

Their viewership statistics suggest 2.5 million people tuned in to watch the 2016 Rio Olympics.

Even if only half of that tune in to watch the Commonwealth Games (be it via a paid subscription or free-to-air Prime) it is not what I would consider a 'non-event'.

And you can bet that if the announcement this morning said that Spark-TVNZ have partnered up this year and held on to the Commonwealth Games...people would be kicking Sky in the ass with declarations of 'yet another nail in the coffin!'.

Poor b@stards just can't win.

[airedale]

OK mistaTea, perhaps not a non-event, I am just expressing my own lack of interest. But as I am off topic I will say no more.

[steveb]

Could be TVNZ decided that the time zones were not going to work for them this time round,it must be difficult to sell advertising for events in the middle of the night.Sky are not so reliant on advertising revenue,so it probably works better for them.So proably a bit of commonsense all round.

[Sideshow Bob]

Whether decided to not let SPK in the door, for the relationship and as a precursor to keeping the next Olympics?

[Bobdn]

Sky has the Olympics, winter and summer, rapped up for the next 5 years.

https://www.sky.co.nz/-/mk_pressrelease_160324

[mistaTea]

I think 2020 will be a big year for Sky. A number of things will happen in the streaming space, and I predict it includes:

1. Rebranding and enhancements to NEON. Much better UX, and the ability to rent Box Office movies with 'one click'. If they can hold the price at $13.95 for HD it will then be a much more compelling offer than Netflix. They could also offer a more expensive package for 4K.

2. Release of more traditional bundles via a new streaming app. Sky GO on steroids (and on the big screen). Packages will immediately become cheaper as there is no MySky fee. As it is a cheaper distribution model they should be able to offer more competitive pricing for bundles - and make bundles cheaper as you add them on to existing packages. People with dodgy internet out in the whops will still end up paying high satellite prices (prices which would probably increase over time as the satellite base continues to dwindle...)

3. Enter the broadband market. I don't think their Vodafone partnership has generated many brand new customers (many will be ex satellite customers who were convinced to try Vodafone TV when they rang Sky to cancel their subscription). So it makes sense to sell internet like Sky TV UK - and they have hundreds of thousands of customers they could immediately target with a marketing campaign.

4. Restoration of a dividend. 5c/share twice a year would be about $43M a year. They can comfortably afford that.


That's what I would do anyway - but my speculation is worth zilch. It's fun though!

[sl234]

I agree, I'm quite optimistic on SKT despite the recent kerfuffles with SPK, they still hold the majority of sporting contracts in NZ and have the premier broadcasting outfit in NZ. Spark doesn't even come close in what they have behind their streaming services, and they simply don't have the capability to run what Sky has going on right now. I think the last sub count was in June this year at 780K, down about 10% from last year, but considering the barrage of bad news that they've gone through I'd say that's a very strong market share for a company with crappy valuation it has now.
My Dad still works at Sky in the broadcasting team, and alot of restructuring has taken place over the last year, but things are quietly optimistic with the new CEO and I'd like to think they're worth alot more than 90c a share.

[mistaTea]

. I think the last sub count was in June this year at 780K, down about 10% from last year, but considering the barrage of bad news that they've gone through I'd say that's a very strong market share for a company with crappy valuation it has now.


Last annual report has total subs @ 778,840 - up slightly from 767,727 the year before. They lost a chunk more satellite customers though (more profitable) but increased their streaming subscriptions significantly (VodafoneTV, Sky Sport NOW and NEON).

As this trend continues I would expect much higher subscriptions moving forward but lower ARPU. And remember, the RugbyPass subscribers will be included in the total subscriber count in the report in Feb. That should push subs back over 800K.
With NEON being so cheap now I expect their subs to increase too.
VodafoneTV subs should increase too now that you can buy their STB outright (and don't have to join Vodafone as your ISP).
Sky Sport NOW should grow too - a standalone sport offering customers have been calling for - for a long time now. I use it and the app is good, so people should warm to using it.

But of course I would expect the great results in the streaming space to be tempered with significant satellite net cancellations. Unfortunately Sky still have not moved on price (they haven't even reduced the MySky fee, nor have they tweaked their bundles yet to make it cheaper to add more bundles once you are already a subscriber). So many satellite customers will head for the door.
Some of them will be convinced to take a cheaper option (VTV, NEON, Sky Sport NOW). But many of them will be so annoyed with Sky that they won't be interested (not in the short term anyway).

So Feb Half Year results are going to be interesting. Really looking forward to reading the report.

[RTM]

1. Rebranding and enhancements to NEON. Much better UX, and the ability to rent Box Office movies with 'one click'. If they can hold the price at $13.95 for HD it will then be a much more compelling offer than Netflix. They could also offer a more expensive package for 4K.



IMO I think they need to avoid doing things like this. That's similar to what they have done in the past and I don't think endears them to their customers at all.

Yep...going to be a fascinating 12-18 months. And that's not just with SKY. Marsden Maritime Holdings, Spark, Trump and USA, Brexit, etc. So pleased I am retired !

[mistaTea]

IMO I think they need to avoid doing things like this. That's similar to what they have done in the past and I don't think endears them to their customers at all.

Yep...going to be a fascinating 12-18 months. And that's not just with SKY. Marsden Maritime Holdings, Spark, Trump and USA, Brexit, etc. So pleased I am retired !

I think there are additional costs to Sky to stream in 4K, so having a tiered pricing model (like Netflix) would not be outrageous. And people who have invested in 4K UHD TV's are pretty philosophical about paying an extra $3 or $4 a month to maximise the potential of their TV.

The problem comes when what is currently new and exciting becomes old hat - yet companies like Sky insist on continuing to charge a premium for the service. This is where they went wrong with mySky.

When MySky came out (back around 2006 I think) people were happy to pay $15/month for the new tech. It was revolutionary at the time. However MySky is very much old tech now, yet 13 years later they still charge high prices for it.

I estimate MySky fees probably accounted for one third of their underlying profit last year. That is scary! That such a significant portion of their earnings comes from a bs fee...and now it makes it hard for them to do away with the fee altogether as they have become dependent on that money. However, if they don't drop it (or significantly reduce it) they will continue to see their satellite base dwindle at an unconfortable rate.

My view is they should bite the bullet and ditch the MySky fee altogether. Focus on upselling your customers new appropriately priced bundles. Some customers will just bank the savings (and be happier + less likely to leave) while others will spend their savings. So someone with Starter + Sport may be inclined to add SOHO for example.

Earnings would take a hit in the short-medium term, but it would go a long way to improving brand value. Long term this is the right way to go in my view.

[Jay]

I was one of those who "bought" Mysky way back. Got it upgraded for free when the HD 3 tuner version came out - think I have saved over the long run, they still replace it if it breaks down, older version did twice and they replaced it -one with someone else's who had just upgraded to the newer version at the time.
So ditching the Mysky fee won't save me anything and you get SOHO free now if you add Sport and/or Movies (I think) to the basic package - still think they should ditch the MySky fee and reduce the basic package price or go back to both "starter" packs for the same price as half of it is free in any event by other means
Agree with your last comment mrT

[mistaTea]

I was one of those who "bought" Mysky way back. Got it upgraded for free when the HD 3 tuner version came out - think I have saved over the long run, they still replace it if it breaks down, older version did twice and they replaced it -one with someone else's who had just upgraded to the newer version at the time.
So ditching the Mysky fee won't save me anything and you get SOHO free now if you add Sport and/or Movies (I think) to the basic package - still think they should ditch the MySky fee and reduce the basic package price or go back to both "starter" packs for the same price as half of it is free in any event by other means
Agree with your last comment mrT

They could revert back to Sky Basic, but offer it for $29.99 per month.

But don’t make it an entry barrier. If someone just wants Freeview channels, movies and SOHO with MySky offer them a bundle for $39.99 per month - 12 month contract or $49.99 no contract.

I think they do have some restrictions on how they currently bundle their offers but they need to sort it out with their content providers. Sky have to offer bundles that customers actually want.

Putting a $40/month hurdle fee between Sky Starter + MySky is just ludicrous in my view. Someone who wants to watch some Sport, Movies and SOHO ends up paying at least $90/month under their current pricing framework.

Nobody with a decent internet connection is going to pay that in 2019.

I discussed this at length with Martin Stewart. He seemed broadly in agreement and he said they are reviewing their current bundles and pricing etc. so watch this space.

[blackcap]

Putting a $40/month hurdle fee between Sky Starter + MySky is just ludicrous in my view. Someone who wants to watch some Sport, Movies and SOHO ends up paying at least $90/month under their current pricing framework.




Exactly correct. I want sport. But I am paying the $50 a month starter price just so I can access sport. Well its $25 now but still far too high. Nice to get Soho for free though as we do watch a bit on that channel.

[mistaTea]

Exactly correct. I want sport. But I am paying the $50 a month starter price just so I can access sport. Well its $25 now but still far too high. Nice to get Soho for free though as we do watch a bit on that channel.

Sky need to work through the numbers to see what is workable, but I would be aiming for something like:

1. New Sport Bundle (equivalent of starter + Sky Sport + MySky) for $49.99/month 12 month contract (the same price they charge for Sky Sport NOW if you take the 'no contract' option).
2. New Movies + SOHO bundle that can be added to the Sport bundle for $20/month
3. Offer other bundles (like Sky Entertainment) for cheaper than the stand alone price if they add it to existing packages.

I reckon a lot of people would be happy to add (2) to (1) at that price point and have a lot of entertainment (something for everyone in the family) for $69.99 per month.

They could use the same thinking to offer other bundles at attractive offerings for the many customers who do not want sport too.

What they need to do in principle is simple. It's just getting the numbers right so Sky can still make a reasonable profit while satellite customers don't feel like they are being taken for a ride.

[Marilyn Munroe]

When do SKY's satellite contracts with OPTUS come up for renewal. I suggest SKY will tell OPTUS they need to offer a realistic price if they want the contract renewed.

In Aotearoa satellite is no longer the only media distrubtion method avaliable.

Boop boop de do
Marilyn

[mistaTea]

When do SKY's satellite contracts with OPTUS come up for renewal. I suggest SKY will tell OPTUS they need to offer a realistic price if they want the contract renewed.



https://www.nzx.com/announcements/328838

Renewed last year to 2031.

[moimoi]

Disney+ available from Tuesday @ $9.99 a month or $99.99 p.a

Disney reported 10M+ subs already after only being live for one week in USA, Canada and the Netherlands.

[peat]

Disney+ available from Tuesday @ $9.99 a month or $99.99 p.a

Disney reported 10M+ subs already after only being live for one week in USA, Canada and the Netherlands.

but apparently they screwed up opening day bigtime. Streaming failures I read somewhere.

[RTM]

Disney+ available from Tuesday @ $9.99 a month or $99.99 p.a

Disney reported 10M+ subs already after only being live for one week in USA, Canada and the Netherlands.

Seems pretty reasonable. We are without extra services (other than the extra month Spark kindly provided) at the moment and I am wondering what to get. Suppose I should have a look at SKY and see what they are offering, but my better half is pretty keen on rejoining Netflix.

https://www.nzherald.co.nz/entertainment/news/article.cfm?c_id=1501119&objectid=12260073

[mistaTea]

Seems pretty reasonable. We are without extra services (other than the extra month Spark kindly provided) at the moment and I am wondering what to get. Suppose I should have a look at SKY and see what they are offering, but my better half is pretty keen on rejoining Netflix.

https://www.nzherald.co.nz/entertainment/news/article.cfm?c_id=1501119&objectid=12260073

NEON only costs $13.95/month now and there is a lot of good HBO and Showtime content on there. You gotta watch Succession if you haven't already! In my view NEON has the largest range of premium content.

Netflix HD is about $16/month or so I think, still very reasonable but you have to navigate through a lot of ****e on their platform. Having said that, I am very excited to watch the next season of The Crown which comes out on Sunday :t_up: They do have some goodies. And if you are willing to stump up $20/month or so you can get it in 4K...not bad at all!

[Baa_Baa]

Another downgrade and a long wait to Feb for an update on how the new strategy is working out. Expecting more SP pressure before this finds a bottom

[Sideshow Bob]

Another downgrade and a long wait to Feb for an update on how the new strategy is working out. Expecting more SP pressure before this finds a bottom

EBITDA of $170-190m equates to 39-43.5c per share. Depreciation I think is pretty grunty, but non-cash. Just what they do with those FCF's....

[mistaTea]

EBITDA of $170-190m equates to 39-43.5c per share. Depreciation I think is pretty grunty, but non-cash. Just what they do with those FCF's....

Well, historically, most of that FCF went straight into shareholders pockets by way of dividend.

At the moment, though earnings are down (and pressure on earnings will remain for some time...) they still generate healthy FCF. Critics have pointed out Sky TV's faults for years - and for the most part, they are right.

So those healthy FCF's must be spent in the near term on new, modern platforms that customers want to use...that are easy to subscribe to, and offer bundles at price points people will accept in the Age of OTT providers.

The market has not reacted too savagely today because that intensive CAPEX was pretty well factored in to the current low SP. I am actually pleasantly surprised they are expecting revenues to be as high as predicted. Perhaps they have managed to slow the attritition of their satellite base somewhat.

Feb results not far away, so we won't be left wondering long.

[mistaTea]

Was thinking about more about the Market Update last night.

I prefer to look at NOPAT instead of EBITDA (depreciation might be non-cash, but tax sure as hell is!). If we deduct $30M (I actually think it will be more like $20M, but let's be conservative...) for tax then we have a NOPAT range of $140M - $160M.

Let's just say Depreciation and amortisation will be approx $100M to keep the numbers simple with the new IFRS 16 rules (it may be lower since we amortised goodwill aggressively over the last two years). So that would leave an accounting profit of say $40M - $60M.

However the depreciation charge is huge, and bears little resemblance to Sky's "stay in business" CAPEX. Most of their costs (content, wages etc) are OPEX.

So CAPEX requirements to 'keep the lights on' in terms of making sure their existing systems and property etc function well is much less than $100M per year. Let's be ultra conservative here by saying that amounts to about $1M a week, roughly $50M a year (even though we know there is no way they are spending $50M a year just on maintenance).

That then generates one of Warren Buffet's favourite metrics: 'Owner Earnings'. Owner Earnings then equal $90M - $110M and may or may not resemble FCF. This is the amount of money, however, that owners have to do what they will with - pay a dividend, reinvest in the business, a combination of both etc.

Of course, Sky TV is in an intensive capital expenditure phase at the moment - and choose to spend a bunch of that money on growth projects. The only realistic way to grow Sky TV is to invest in modern digital platforms and creating new revenue streams (i.e. purchase of RugbyPass).

The Owner Earnings figure is key though. The company could choose to pay it all out as a dividend (which would be foolish in Sky's case at the moment) or they can choose to invest it back in the business for growth.

Even though I understand there are a plethora of 'bad news' stories our there for Sky, I am still amazed that even after a capital intensive strategy change, the business is so profitable that it will still likely generate 'Owner Earnings' of around $100M.

Closing Market Capitalisation yesterday was $388M. To be selling at less than 4 times projected Owner Earnings is baffling to me (don't get me wrong, I am happy as it enables me to buy more...). But baffling all the same.

The analysts and institutions must assume that none of the new initiatives Sky TV are working on will be successful I suppose, and Spark will crush them in Sport even though Sky have held on to key sporting rights out to 2026.

[mistaTea]

https://www.vox.com/recode/2019/11/18/20970066/hbo-max-netflix-streaming-cable-bundle-john-stankey-warnermedia-cord-cutting

Agree with John Stankey that customers will look for good content aggregators. The fragmentation of services drives me nuts.

I wouldn’t mind paying $10/month for all of the Disney content, however I am not signing up because I already have 5 services - Netflix, NEON, Lightbox, Sky Sport NOW and TVNZ ON DEMAND) and it’s unwieldy already. I have to actively go hunting across the platforms to see what I might want to watch.

With a little luck the new Sky TV app will include API’s that allow it to connect to other service providers like Netflix and Disney etc. so their content can be aggregated with Sky’s.

I know Netflix give Spark wholesale rates, so Sky could get the same and offer Netflix at cost to get people on the new platform.

It would be presented as another channel just like they have for BeinSport.

[RTM]

You need to put yourself on a diet. It’s summertime !
Interesting talkback on ZB this morning. Apparently really aggressive discounting by SKY if you try to leave.
Lots were, and loving Disney. Already.


https://www.vox.com/recode/2019/11/18/20970066/hbo-max-netflix-streaming-cable-bundle-john-stankey-warnermedia-cord-cutting

Agree with John Stankey that customers will look for good content aggregators. The fragmentation of services drives me nuts.

I wouldn’t mind paying $10/month for all of the Disney content, however I am not signing up because I already have 5 services - Netflix, NEON, Lightbox, Sky Sport NOW and TVNZ ON DEMAND) and it’s unwieldy already. I have to actively go hunting across the platforms to see what I might want to watch.

With a little luck the new Sky TV app will include API’s that allow it to connect to other service providers like Netflix and Disney etc. so their content can be aggregated with Sky’s.

I know Netflix give Spark wholesale rates, so Sky could get the same and offer Netflix at cost to get people on the new platform.

It would be presented as another channel just like they have for BeinSport.

[Jay]

..
Interesting talkback on ZB this morning. Apparently really aggressive discounting by SKY if you try to leave.
Lots were, and loving Disney. Already.

They should be lowering their process overall, as I said both starter and "entertainment" for $25 or so - not each

I do wonder how much some are paying for all these services - excluding sky and as mr t says got to go hunting for a programme over different platforms - me old school - Sky- the 2 basics and Sport only (free SOHO) and TNVZ on demand plus Spark Sport for the (Motor racing in the main)

[mistaTea]

They should be lowering their process overall, as I said both starter and "entertainment" for $25 or so - not each


Agreed, it really annoys me when I see that them offering such aggressive New Business pricing and then even more aggressive Retention Pricing. It is a policy they had before, and it failed big time. If they just got their pricing right in the first place - they wouldn't have to jerk their customer base around.

I have raised this with the CFO, CEO and Chairman in person. I hoped they would listen, and feel somewhat less than pleased when I hear that not only have they not taken my input seriously - but have actually gone down a flawed strategy (presumably with the hope of being able to report decent subscrition numbers in Feb, thereby propping up the Shareprice in the short term).

I have just sent an email to the CEO and CFO expressing my concerns and highlighting my displeasure. Reproduced below.

*****************

Martin,

Following on from the conversations I have had with both of you regarding pricing and bundling content in an attractive way...


A discussion on talkback ZB yesterday morning covered Sky TV - and how Sky are currently 'heavily discounting' bundles to stop people from going when they threaten to cancel. I am not a satellite subscriber so I can't ring the Call Centre and test it out for myself.
But I believe the stories as it sounds about right. Sky have done this type of thing in the past in order to prop up subscription numbers. A strategy that only ever works in the short term at best.


Martin, I forget which Annual Report this was discussed (possibly 2016 or 2017), however your predecessor confirmed that Sky TV would stop the practice. The reasons were essentially two-fold:




It really really pisses off existing loyal customers who don't complain and loyally pay their fees month in and month out when they find out that all it takes to get a better price is to ring up and threaten divorce; and
The customers who end up staying based on the discounted offer end up leaving anyway. Once the price goes 'back to normal' after their offer period expires they tend to bugger off, so holding on to them with a 'we're begging you, please don't go' strategy is really doomed to fail.


As I discussed with you at the AGM, and I repeat - if you offer attractive bundles and pricing in the first place you need not worry about high churn rates. People will stay with you because you are offering value for money. Many will spend their 'savings' on aquiring more content if the price is right (we observed that when Sky Basic was split into Starter + Entertainment).



I won't repeat the whole discussion we had here, but getting rid of things like MySky fees, reassessing your bundles and making it cheaper to add more bundles to existing packages (i.e. if you have our Sport package, you can add Movies + SOHO for $20) is the way to go long term. Earnings may well take a hit in the short-medium term, but it is necessary for the long-term prosperity of the business. And earnings may not suffer as significantly as you think, given the right marketing strategy to encourage custromers to take more content.


How else will we increase our brand value in consumers minds? We have to come to grips with reality.


Right now, you are effectively doing what I am saying anyway - dropping your prices. But you are doing it in a way thay really pisses people off:




Aggressive New Business Deals (Free Starter + Movies or Sport for a month and free MySky for 3 months...)
Agressive discounts when customers try leave at the end of their contract because they are now paying 'normal' Sky pricing - and they just can't justify the high expense relative to other entertainment options.


For the love of God, just offer attractive pricing in the first place and you won't have to do any of this. These issues could be fixed virtually over night - you don't have to be the cheapest (as we do offer a premium service) but you still need to be competitive.



One final example, to show how nuts the current situation is. My sister in law is a satellite subscriber. A year or so ago a salesman knocked on the door and offered her a heavily discounted package for a 6 month contract. From memory it was $60/month or so and they got Starter + Sport + SOHO + MySky (usually $80 worth).


Once the 6 months was up and their pricing reverted to 'normal' they contacted the guy who sold it to them and said they wanted the same deal again or they would cancel. He advised her to cancel her current sub, wait for the stand down of a month or so and then he could sign them up again for the same deal under her husband's name to get around the system/policy constraints.


Which is what they did. And once their current offer comes to an end I am 99% certain they will leave and then we will offer them some other 'amazing discount' to stay.


I have discussed this at length with them and they have confirmed that if Sky just offered the pricing they are currently getting as their normal offering they would not cancel. They end up with a price they consider 'fair' anyway however they have to go through this whole rigmarole to achieve it - which just ends up annoying them.


I really hope you both take this feedback seriously. It's one of those situations in life where I know deep in my gut that I am absolutely right in what I am saying - and your team have got this one terribly wrong.


Feel free to forward this feedback to Philip Bowman, I think he should see feedback from shareholders who are also customers.

[Jay]

Good on you mr T :t_up:

[blackcap]

Yeah well said. Lets see if they heed your call. If I could be bothered I would do the cancel and re sign thing too. Its a rort and SKY need to adjust their pricing.

[Benny1]

Well said.. Couldn't agree more..
I did drop sky for a few years but missed my Rugby league!
Currently have Sky Starter and entertainment. Have saved the money on Sport for the summer as the cricket these days seems pretty boring to me !
Sky Starter is a rip off on its own.. And paying for MySky which I do also grates..
I do like My Sky and find it easy to use.. It's just not that special anymore!

If Sky loose the NRL then I really couldn't justify keeping it..
Had one if those Kodi boxes for a while but to be honest I found it to be a pain in the arse...

No a holder and not intending to be anytime soon..

[Beagle]

You need to put yourself on a diet. It’s summertime !
Interesting talkback on ZB this morning. Apparently really aggressive discounting by SKY if you try to leave.
Lots were, and loving Disney. Already.

What sort of pricing mate ?

I currently have Sky Starter and Sky entertainment, (solely for CNBC because I still love watching it on the big screen and do get some good info on what's happening overseas with investment trends and idea's so it probably pays for itself many time's over to be honest), and Sky movies for $72 a month. I "bought" the My Sky box years ago so they don't change me for that but it actually turns out I don't own it, which is great because my hard drive died last year and they gave me a new My Sky box for free.

Wonder what I could get it down to if I threatened divorce ? Thoughts ?

I wouldn't touch their shares with a barge pole.

[mistaTea]

Yeah well said. Lets see if they heed your call. If I could be bothered I would do the cancel and re sign thing too. Its a rort and SKY need to adjust their pricing.

Yeah let’s see what happens. Feb will be interesting in terms of strategy etc.

The new team are getting so many things right (in terms of new direction etc). Which is why I am still optimistic about their future.

But for some reason they seem to repeatedly drop the ball when it comes to their satellite pricing and discounting strategy.

And because I always try to remain objective with my investments it’s important for me to call things out when I see them (as opposed to pretending everything is peachy just because I own some shares and hope like hell everything is going to turn out ok).

Martin might not have liked my email - but I’m his biggest fan, and am in his corner 100%. But your best friends are the ones who are prepared to give it to you straight.

[bull....]

good to see mister t being pro active. i ditched sky 2 years ago now and they tryed to keep us by offering sky free for 6 mths but they pissed me off with there price gouging so i said bye anyway.

just signed up to have a look at disney+ but if you take out all the kids stuff theres not much on offer. so dont see it as a big competitor at the moment for netflix or sky

[mistaTea]

just signed up to have a look at disney+ but if you take out all the kids stuff theres not much on offer. so dont see it as a big competitor at the moment for netflix or sky

Yeah some of the 'bad news' stories for Sky relating to losing content like Disney are way overhyped in my view. I do not see many people (if any) cancelling their Sky subscription because they are moving on to the Disney+ platform.
The Disney offering is great for kids, but it is not a replacement to Sky TV (or Netflix for that matter). It is a complement (for which the consumer needs to fork out another $10/month or $99 for a year in advance now).

You will find that losing Disney is more likely to have the counterintuitive result of increasing Sky's profit. Because they stop paying Disney for their content but don't really lose any subscriptions as a result.

There are core channels and content that the majority of Sky customers subscribe for, be it sporting codes, movies, SOHO or some of the Entertainment channels. So they absolutely need to hold on to the content that is the biggest drawcard for their customer base, but we should all keep some persepective.

If HBO did not renew their deal with Sky beyond 2023 - that would be a significant blow. You would absolutely see more subscriptions in satellite drop if they lost that (NEON subs would drop too). Anything could happen in this ever-changing landscape between now and 2023, but HBO just renewed their deal with Sky UK (even though they are releasing HBO Max next year). So I don't think we can conclude from Disney's move that all other premium content providers (like HBO, Showtime, FX...) are going to sever their relationships with cable and satellite TV aggregators.

In fact, given the plethroa of OTT providers already my pick is they will release their own OTT offerings too but keep the cashflow from aggregators coming in since the OTT market is so crowded and it will become more and more difficult for new OTT entrants to gain meaningful marketshare.

[mistaTea]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12287343

My 'good mate' Mr Keall filling his knowledge gaps with more speculation again.

I do not believe for one second that NZ Rugby (with Brent Impey in particular in mind) care one bit about the recent drop in quoted value of their Sky TV shareholding.

Taking equity as part of the recent rugby deal was part of a long term strategic commitment. Share Price will be a small factor in how Brent views value - the main drivers will be how the closer alliance between NZ Rugby and Sky TV can develop the game in New Zealand.

I am all for objective criticisms of Sky TV - I have many of my own criticisms to make - but Chris has a habit of just making up stories when he is bored.

Still, I should probably thank him I suppose. I doubt many analysts and investors take his articles seriously (they really are low quality, as a general rule) but it all adds to the negative sentiment which allows new investors to buy in with a large margin of safety.

[Benny1]

Have found Sky terrible just lately to communicate with.
They seem to have forgotten how to communicate with there loyal subscribers.. Probably too busy trying to bribe the ones threatening to leave!
Their facebook page had been full of comment's such as "Sky when are you going to get back to me?"
" Sky when are you going to answer my question?"

[mistaTea]

https://www.nzherald.co.nz/sport/news/article.cfm?c_id=4&objectid=12288544

More speculation on the cost of rugby to sky.

We will never really know the true cost as it was not long ago 'insiders' and 'experts' were touting $400M as the price paid.

All we know is it definitely didn't come cheap. I tend to think that NZ Rugby did not make them pay a cash component that was likely to run them into the ground given they are now a major shareholder. Logic would dictate they expect Sky to do well over time - and to do that they have to be able to afford the content rights they purchase.

Revenue is going to continue to drop over the next couple of years at least due to falling satellite subscriptions. Digital streaming services are likely to continue to grow rapidly which will take out some of the sting of the satellite subscription loss in the short term - but right now the reality is you need about 3 or 4 NEON subscribers to replace a current Sky Movies + SOHO satellite subscriber.

So they are going to need to be picky around what content they retain to keep costs manageable during their transition to streaming. Losing Domestic Cricket may end up being a blessing in a way. There will be other content - entertainment and sport - that they will need to drop I think.

If they can roll out the new Sky TV app soon, they should be able to convert a lot of their existing satellite subscribers to cheaper streaming bundles (instead of losing them altogether or at best convincing some to take NEON and/or Sky Sport NOW).

They still get $54/month from me for my NEON and Sky Sport NOW. But I would be happy to pay them total of $75/month for a more comprehensive bundle that gave me a wider range of entertainment channels and sport.

Got some more capital becoming available next week and I want to buy more. Let's pray the price drops well below 80c again after the latest speculation :t_up:

[Sideshow Bob]

Partner with TVNZ to deliver the Olympics

https://www.nzx.com/announcements/345074

Maybe it is just to get Keith Quinn to commentate the weightlifting and womans gymnastics???

[Jay]

[/QUOTE= Maybe it is just to get Keith Quinn to commentate the weightlifting and womans gymnastics???
/QUOTE]

Maybe :)
Though with all due respect I think Keith Quinn has had his day and should stick to Funeral insurance ads :)

I note is does not say Live coverage on TVNZ 1 - there maybe some??

Not using Prime this time???

[Sideshow Bob]

[/QUOTE= Maybe it is just to get Keith Quinn to commentate the weightlifting and womans gymnastics???
/QUOTE]

Maybe :)
Though with all due respect I think Keith Quinn has had his day and should stick to Funeral insurance ads :)

I note is does not say Live coverage on TVNZ 1 - there maybe some??

Not using Prime this time???

I was taking the Michael about good old Keith. Has had his day, although surprisingly he is only 73. But will forever be remembered for the greatest piece of sports commentary in NZ history! (1995, Jonah and an on-air orgasm!)

[mistaTea]

[/QUOTE= Maybe it is just to get Keith Quinn to commentate the weightlifting and womans gymnastics???
/QUOTE]

I note is does not say Live coverage on TVNZ 1 - there maybe some??

Not using Prime this time???

Sky will not use Prime - TVNZ have dibs on all free-to-air coverage.

And TVNZ will get to broadcast Live coverage. But they are going to have to be selective on what they will show for the 12hrs/day they can show coverage on TV1.

Sky will still be the only place where all the games can be watched live across their numerous Sports channels (with the ability to add pop-up channels if need be).

We will never know how much TVNZ have paid to buy-in, nor whether Sky will get to share a portion of the ad revenue TVNZ generate during the tournament...

However one thing is for sure - Sky would not have given TVNZ the same sweetheart deal Spark Sport gave them for the RWC. Spark Sport had to give them a sweet deal as they needed their production capabilities and backup broadcast ability.

Sky already has a core competency in Production and also have Prime, so I don't think they needed TVNZ in the same way. Logic would dictate that TVNZ needed to pay a fair price to join in.

Regardless, this should be a good partnership - and definitely good for NZers as a whole as between TVNZ and Sky they can literally reach every single household in NZ.

[mistaTea]

https://www.stuff.co.nz/business/117779586/speculation-spark-and-sky-have-been-in-talks-over-lightbox

Speculation that Sky could go into business partnership with Spark?

[Well Endowed]

https://new.grabone.co.nz/electronics-computers/tv/p/sky-tv-1

I'm not someone who uses grabone, but still get the emails and noticed this deal. Another case of not offering existing customers the same offer as that of new customers which is always a bit of an insult.



disc: not holding, as not convinced recent moves have been strategically sound.

[Jay]

It says existing customers offer sold out - was there one???
If there was, why did they not email the offer to all existing clients and not just bury it in Grabone somewhere!

[mistaTea]

https://new.grabone.co.nz/electronics-computers/tv/p/sky-tv-1

I'm not someone who uses grabone, but still get the emails and noticed this deal. Another case of not offering existing customers the same offer as that of new customers which is always a bit of an insult.




https://skytv.custhelp.com/app/answers/detail/a_id/4079

This is where you redeem the GrabOne voucher it seems. Looks like an offer they are doing as part of 'Black Friday'.

The offer was for existing customers, not New Business.

I don't think it is realistic for them to offer their entire satellite customer base 50% off their current deal, regardless of what package they have.

I mean, the company does still need to make a profit! :cool:

[Baa_Baa]

Why would Sky sell OSB? Need the capital, get a better deal outsourcing? https://www.stuff.co.nz/business/117832627/sky-tv-consults-outdoor-broadcasting-staff-on-osb-sale-proposal

[mistaTea]

Why would Sky sell OSB? Need the capital, get a better deal outsourcing? https://www.stuff.co.nz/business/117832627/sky-tv-consults-outdoor-broadcasting-staff-on-osb-sale-proposal

Very interesting. If they bought it for $35M in 2010 I wonder how much NEP would pay to acquire it today.

I do know that Sky have made no bones about the need to reduce costs. Paying OSB staff, plus all the costs for the equipment and trucks etc...

I can see the temptation to get rid of those costs given their ability to produce their own local sporting content is no longer a competitive advantage.

Could make sense if NEP offer Sky pricing that is cheaper than their current OSB costs and provide the same high quality service.

[Baa_Baa]

The company is rapidly changing under new leadership, but the key metric for me is when they stifle customer losses, securing a base to grow from. Eyes on but not prepared to risk it just yet.

[mistaTea]

https://www.nbr.co.nz/analysis/sky-puts-shareholders-back-queue

Some pretty stiff criticism from Shoeshine in this piece.

They don't offer any alternatives in terms of what Sky should be doing instead, of course.

I still expect underlying Owner Earnings to be slightly north of $100M at the next Annual Report. And I hope they don't pay a dividend again - rather use that huge sum of cash to sort out their streaming services and reduce debt even further.

They are much more likely to be able to generate a higher return reinvesting in the business than I will get if they give me the money (which is then taxed) and attempt to find some other investment opportunity in this market.

[mistaTea]

The Herald just posted an article about Vocus (Owner of Orcon, Slingshot) getting ready to have another crack at offloading their NZ assets.

That was 30 mins ago, and now the article has been pulled down mysteriously.

I remember this old article: https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12277295

Martin Stewart confirmed to media in October that he was in discussions with Vocus about possible partnerships with Sky. I assumed he meant wholesale agreements (like Sky have with Vodafone).

If Vocus are putting the NZ assets up for sale again, I wonder if there is an opportunity for Sky?

[Entrep]

I've been trying to work out if the SP would be higher or lower if Fellet was still in charge. Any opinion?

I think it would be higher than it is now were Fellet still there, and in a decline, but a slower one.

Stewart is making the tough decisions and has brought on the pain earlier than would have otherwise been felt under Fellet. He's doing what needed to be done to try and ensure long term survival and success (and eventual upward trajectory again).

But then again they say SP is the best indication of a company at any given point in time, so what does that say about Fellet v Stewart if my hypothesis is correct?

[mistaTea]

I've been trying to work out if the SP would be higher or lower if Fellet was still in charge. Any opinion?

I think it would be higher than it is now were Fellet still there, and in a decline, but a slower one.

Stewart is making the tough decisions and has brought on the pain earlier than would have otherwise been felt under Fellet. He's doing what needed to be done to try and ensure long term survival and success (and eventual upward trajectory again).

But then again they say SP is the best indication of a company at any given point in time, so what does that say about Fellet v Stewart if my hypothesis is correct?

Very interesting thought. Short answer: we can speculate all we want and never be any the wiser!

Having said that, speculating a bit can be fun though...so here is my two cents +GST...

I think it is hard to compare because both men have quite different strategies for Sky's future.

Fellet was betting big on Cisco's Infinite Video Platform. Stewart canned this pretty quickly when he came on board, and so shareholders had to eat a write-off to the tune of damn near $40M. That was real money down the tubes by the way, and obviously put even more pressure on the SP.

IVP had a lot of potential if you were still planning to have a set top box future. The UX is supposed to be very good from what I hear and IVP can seamlessly integrate with other 3rd Party Platforms. So, in theory, you could link in your Netflix, Amazon etc subscriptions to your IVP STB and all of your content from Sky, Netflix and whatever else you subscribe to could be presented to you in one easy-to-use platform. Being able to aggregate numerous platforms would be a huge plus.
It would work with satellite for those in poor internet areas, and also allow users to stream all of their content over the internet if they so chose.

Of course, that is still a capital intensive model though. You have to purchase a whole bunch if IVP boxes (being new tech, they won't be cheap starting out) which means you have to pass some or all of that cost on to the consumer. So you still end up with a 'My Sky' fee moving forward which is a big hurdle to getting people to sign up (and then retain them).

As much as I like a number of features IVP offer...I am personally with Martin Stewart in the decision to terminate the project, eat the cost and move to streaming. No doubt it has put extra pressure on the SP - but I couldn't care less about SP. I am more interested in how the business is likely to perform over time.
Sky Sport NOW and RugbyPass (both very good apps) are from Endeavour Streaming. If I was working with Prabhu (CTO) and the team I would be advocating hard to get Endeavour to build the 'new NEON' as well as provide an app for people to subscribe to traditional Sky channels however with a much more beefed up On Demand menu. As these methods of distributing content are less capital intensive, cheaper pricing can be offered. Customers can also sign up easily and start watching right away (as opposed to needing to contact Sky, get them to send out your IVP set-top box...wait a few days for it to arrive...possibly need tech assistance to get it working correctly. Just too much of a hassle).

So in summary - I agree that the SP may well be a little bit higher if Fellet was still in charge. But as much as I admire the tremendously profitable company John Fellet built...I think he had it wrong towards the end of his tenure in a number of areas, and the new guy has the right idea. Whether or not he can execute his vision effectively and turn the company's fortunes around is yet to be seen - but I like the plan so far.

[mistaTea]

https://www.stuff.co.nz/sport/rugby/super-rugby/118070056/we-are-all-broke-waratahs-chairman-calls-for-urgent-rugby-australia-overhaul

Need to keep an eye on what is happening across the ditch.

There has been so much speculation in the media that Sky have agreed to pay NZ$100M per year for rugby from 2021.

I don't have any inside information so I can't be sure what they have paid...but when I read that Foxtel are currently paying NZ$59M per year for equivalent broadcast rights in a larger market, it does make me doubt the veracity of the '$100M' claim.

Sky clearly agreed to stump up more for rugby from 2021 than they are currently paying (and even gave some equity to NZ Rugby as a sweetner), but I just get the feeling that they haven't had to fork out nearly as much cash as people seem to think.

Given the relatively small market in NZ...I don't think it is realistic to think that a NZ broadcaster agreed to pay half a billion dollars + 5% equity in the company to show some rugby to a minority of their subscriber base. At that cost you would be better to let Spark shareholders have a crack if they are brave enough and focus on other sports and entertainment.

A more realistic scenario in my opinion is that Martin Stewart lifted the cash component by a more modest and affordable percentage and used the 5% equity to make the deal more compelling. NZ Rugby have taken the long-term view that they will be better served over the next 10,15,20 years taking less cash now than they may well have been able to get if they went with Spark... but now own a significant piece of a proven broadcaster that can help them grow and promote the game.
Brent Impey is a smart guy and it would make zero sense for him to take such a large equity stake in Sky...and then run the company into the ground by demanding half a billion dollars in cash over 5 years.

It would make more sense for the two organisations to have had frank and open discussions in an effort to find the Win-Win.

[ben28]

Stayed in a motel at the weekend
Had Netflix and YouTube and Freeview channels , no sign of Sky
Interestingly the internet went down on Saturday night while trying to watch Netflix. So they were probably on Spark broadband also.
Maybe they’re getting Netflix for free through Spark so Spark adding Spark Sport for a small extra fee will be doable

Weren’t the Sky fees for commercial usage a lot higher than residential? So less cash flowing to Sky now

Maybe they’ll be giving away Sky to commercial premise to maintain brand awareness like newspapers now

[mistaTea]

Maybe they’ll be giving away Sky to commercial premise to maintain brand awareness like newspapers now

More likely Sky will join the trend whereby people are able to provide their own OTT entertainment now when staying at hotels/motels...and provide more streaming capability at attractive prices so they grow their subscription base that way.

I imagine more and more motels will give Sky the flick. They do pay high commercial rates and the amount of guests that watch will no doubt be dwindling as people bring their own NEON, Netflix, Lightbox etc subscriptions with them on their smartphone. Especially guests under the age of, say, 40.

I think Sky will hang on to the pubs for quite a while longer though - live Sport still helps bring in the punters and nobody has the range of Sport that Sky does.

[moimoi]

SP continuing to decline rapidly.

Seems bizarre when content providers are being valued in the stratosphere that management would embark on the sale of the crown jewel OSB.

SKY needs to transition to being a content provider with its ready made skills...

Aggregation of others material doesn't appear to be working sufficiently to maintain, let alone improve, value for owners.

[bull....]

new lows , they really dont get it , even the new ceo. pricing to high when there is a abundance of competitors. they really need to offer pay per channel options as a difference no way they compete against netflix , even disney and hbo when they ramp up will steal more of there customers.

[mistaTea]

Sky finally letting customers cast their SkyGo to the big screen. Article in the herald just confirmed it.

Hopefully they will let customers sign up to SkyGo as a stand-alone offering soon.

That should enable them to offer much sharper pricing than their capital intensive satellite model.

I would be happy to swap my NEON and Sky Sport NOW subs for SkyGO if the pricing was reasonable.

I pay $54/month at the moment. I’d be happy to pay $75/month for a comprehensive SkyGo entertainment and sports bundle. It would be more convenient to have all of the content on one platform (whereas right now I have to navigate between NEON, Sky Sport NOW and TVNZ ON DEMAND).

[winner69]

Share price couldn’t possibly sink into the 60’s could it?

Getting more unloved by the week

[clarky]

If management got its direction right it could be a share to watch, but currently is a dog and seems far away from having any upside.

[mistaTea]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12295172

If you can't beat 'em, buy 'em!

[RGR367]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12295172

If you can't beat 'em, buy 'em!

Gut feel says this is another bad move.

[cyclist]

Gut feel says this is another bad move.

Mine too. Wouldn't be surprised to see Spark get a wee lift on the back of this, but not Sky. We will see.

[676767]

I really don't see how this is a good move. Id bet a majority of current lightbox sub's come for free with spark broadband, and the content isn't exactly good enough for people to subscribe once they stop this

[Well Endowed]

I really don't see how this is a good move. Id bet a majority of current lightbox sub's come for free with spark broadband, and the content isn't exactly good enough for people to subscribe once they stop this


As a spark broadband customer - this is exactly how I feel. I think in the past 12mths outside of the handmaids tale, I haven't watched anything on Lightbox in months. I cant see myself paying for a specific subscription to this

[RupertBear]

I really don't see how this is a good move. Id bet a majority of current lightbox sub's come for free with spark broadband, and the content isn't exactly good enough for people to subscribe once they stop this

I agree. I get “free” Lightbox with my Spark Broadband and I wont be subscribing to it in the future thats for sure

[bull....]

light box is rubbish as a past user when it was provided free. would never pay for it and i doubt sky will ever be able to make it a competitor to netflix or any of the big competitors due to enter NZ next year. prediction sky subscribers leaving will accellerate when the big competitors arrive next year and by then as well disney will have begun ramping up with there original content.

[TideMan]

For a while Lightbox was good. It had all the ScandiNoir stuff like The Bridge, etc, but nowadays it seems to be only American crap on there.

[Entrep]

Gut feel says this is another bad move.

I agree also and I think the reason is that Sky's brand is absolutely poisoned in New Zealand.

That said, consolidation of the local players to compete against Disney, Netflix, etc seems smart versus a disjointed offering, and if they really nail the proposition to VF and now Spark broadband subs it could work. Spark customers were previously off limits for Sky so to speak.

[mistaTea]

Interesting comments above.

Two comments from me:

1) Sky are investing in upgrading their NEON platform. I believe they will most likely move the Lightbox content over to the refreshed NEON. This will mean that NEON will not only have HBO/Showtime/FX etc but also some of the great content Lightbox have from Hulu etc.

2) Sky is going to have a wholesale agreement with Spark. So Spark customers will get access to the new NEON for "free" (just as they currently do with Lightbox) if they have a qualifying broadband or mobile plan.
Spark benefit because they are offering their customers an even better SVOD service if they use their internet or mobile services.

Sky benefit because their subscription numbers are about to Sky rocket.

[bull....]

Interesting comments above.

Two comments from me:

1) Sky are investing in upgrading their NEON platform. I believe they will most likely move the Lightbox content over to the refreshed NEON. This will mean that NEON will not only have HBO/Showtime/FX etc but also some of the great content Lightbox have from Hulu etc.

2) Sky is going to have a wholesale agreement with Spark. So Spark customers will get access to the new NEON for "free" (just as they currently do with Lightbox) if they have a qualifying broadband or mobile plan.
Spark benefit because they are offering their customers an even better SVOD service if they use their internet or mobile services.

Sky benefit because their subscription numbers are about to Sky rocket.

lightbox was never going to survive as a stand alone service nor was neon , looks like a convenient marriage to last a little longer. i imagine when the streaming wars get into full swing between the international majors sky will lose more content as they all take it in house to promote there own services.

[mistaTea]

SP just dropped to 69c. Unreal!

They just announce that they are merging a competitor’s content with their own.

They just announce that their subs are about to Skyrocket as they will have a wholesale agreement with the countries largest telco.

And after an early (very small bump) in SP in earlier trading...the stock is now about to close at its lowest price ever.

How can Sky possibly be worth LESS today than it was yesterday?

[boysy]

Might be time to remove those rose tinted specs - sky are moving far to late and far too slowly they will continue to lose content and viewers I think mr market is valuing this one correctly

[mistaTea]

Might be time to remove those rose tinted specs - sky are moving far to late and far too slowly they will continue to lose content and viewers I think mr market is valuing this one correctly

If ‘everyone’ is correct about Sky being on a path of certain failure, with no hope of prosperity (apparently no matter what they do!) then the current SP makes even less sense!

It should be $0.00!!

[bull....]

If ‘everyone’ is correct about Sky being on a path of certain failure, with no hope of prosperity (apparently no matter what they do!) then the current SP makes even less sense!

It should be $0.00!!

probably will be one day

[bull....]

see apple in talks with MGM so if sucessful skt might lose the mgm content

[mistaTea]

I wonder if the new service will be based on the NEON platform...or if they will stick with Lightbox.

Some people I know have reported issues with Lightbox...but I have never had any. And they have a great AppleTV app - so that fulfils my selfish requirements :t_up:

Will also be interesting to see what the cost will be for the new service.

[bull....]

I wonder if the new service will be based on the NEON platform...or if they will stick with Lightbox.

Some people I know have reported issues with Lightbox...but I have never had any. And they have a great AppleTV app - so that fulfils my selfish requirements :t_up:

Will also be interesting to see what the cost will be for the new service.

spark gave it away for free to people because it wasnt a able to charge the product as a stand alone service as for sky im sure they will be looking to rort everyone with pricing lol

[mistaTea]

spark gave it away for free to people because it wasnt a able to charge the product as a stand alone service as for sky im sure they will be looking to rort everyone with pricing lol

Yeah Spark struggles to get paying subs because, though they do have some good stuff on there, there just isn’t enough to justify paying a monthly subscription. I have only ever used it as a “freebie” with my broadband.

Nice app though. And Sky can maybe lift their NEON subs by a couple or bucks a month when they combine the Lightbox content.

Spark customers still get it for “free”. Good deal I think.

[mistaTea]

Looks like it will take a few months before they figure out how they are going to merge the two platforms, and transition customers over etc.

Any predictions on subscription numbers that will be reported in Feb?

If the platforms have not been merged by the HY report, I am thinking it will be about 1.2M subs.

That would account for further reduction in the satellite base (prob not as severe a reduction as the last couple of years) as well as gains in NEON, Sky Sport NOW, RugbyPass and the 350,000 Lightbox customers that Spark will start paying Sky wholesale rates for.

Of course, once NEON and Lightbox are merged the numbers will drop slightly. I have no idea how many existing NEON customers are also Lightbox customers too though.

I have NEON, Lightbox and Sky Sport NOW. So I will be considered '3 subscribers' until the merger when I will drop back to being viewed as 2 subs.

[winner69]

MistaT - share price still in doldrums eh

Likely to stabilise around current level or drift further?

[mistaTea]

MistaT - share price still in doldrums eh

Likely to stabilise around current level or drift further?

Yes indeed, Mr Market still maintains a very pessimistic view of the company. Predicting whether he becomes more depressed or more optimistic in the short-medium term is really not my game.

The SP could be 1c/share or $2/share tomorrow and neither one would make me feel happy or sad. Since the stock doesn't have any feelings for me, I have no feelings for the stock.

All I care about is what the business is doing. If the SP ever exceeded my value estimate I might sell. Or if the story ever changed, and the current SP exceeded my revised value estimate I might decide to sell too.

Conversely., I keep buying.

Beyond that, I don't really care and keep doing what I am best at - which is doing nothing.

[mistaTea]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12301604

Though I (clearly) think content aggregators have a place in a streaming future...I do wonder about cinemas.

I don't think they will necessarily go the way of Blockbuster...but I can imagine a scenario where going out to the movies becomes more and more of a treat (which could decimate their revenue).

With people able to get large (70+ inch) 4K UHD TV's for relatively cheap these days, setting up the lounge and streaming movies at home is more and more appealing. You can rent The Joker right now on Lightbox (as an example) for $7.99 - way cheaper than taking the family out to the movies.

I only go to the movies nowadays if a new movie is out that I really REALLY want to see - and don't want to wait until it is available to rent on PPV.

[Preston]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12301604

Though I (clearly) think content aggregators have a place in a streaming future...I do wonder about cinemas.

I don't think they will necessarily go the way of Blockbuster...but I can imagine a scenario where going out to the movies becomes more and more of a treat (which could decimate their revenue).

With people able to get large (70+ inch) 4K UHD TV's for relatively cheap these days, setting up the lounge and streaming movies at home is more and more appealing. You can rent The Joker right now on Lightbox (as an example) for $7.99 - way cheaper than taking the family out to the movies.

I only go to the movies nowadays if a new movie is out that I really REALLY want to see - and don't want to wait until it is available to rent on PPV.


Its a really interesting landscape at the moment. Cinemas refusal to accept the Netflix films seems a bold move. Change is coming whether they like it or not and early adopters often have more luck at surviving.

Couple of ways it could go, Netflix starts buying out Cinemas or Builds its own and creates experiences for people better and cheaper than the current cinemas for their special member rate.

Perhaps Cinemas will find a niche in festival type movies?

If I owned a half decent theatre, I’d love to show ‘The Irishman’ for cost and hope to make money on booze and chocco dipped ice creams!

i agree that there is more value to come from Sky, how long till they get their hands on Spark Sport? I read the Spark annual report and there were all of two lines about SS and how they wanted to go for better content caveated with something like “as long as it doesn’t cost too much”. They’re a Telco! Stick to telco-ing!

Adding their grasp of light box plus a huge flush out of costs (anecdotal reports from the shop floor) and a CEO at the helm who does this stuff in his sleep....then it’s gotta be worth at least par value I’m thinking.

All it will take will be some positive news and a brand push and hopefully the punters will see that they do love this ugly duckling. Early Feb perhaps?

[bull....]

tried neon over the holidays , watched game of thrones again which was a good series. pretty disappointed with the platform though froze temporary at times , failed at times to remember where we were up to in the series. selection of content is poor in comparison to netflix. overall not a competitor or threat to the likes of netflix at all.

[mistaTea]

tried neon over the holidays , watched game of thrones again which was a good series. pretty disappointed with the platform though froze temporary at times , failed at times to remember where we were up to in the series. selection of content is poor in comparison to netflix. overall not a competitor or threat to the likes of netflix at all.

Agreed - current NEON platform is dogsh!t compared to Netflix. The improvements they have been working on the last few months will need to be damn good.

Disagree with your comments about their content not being as good though. Sky hold contracts with HBO, Showtime, FX etc...these studios produce the best ‘premium drama’.

Netflix produce a lot more content than HBO etc but I find that most of the stuff on their platform is pretty average. They have some hit Netflix Original shows I love - but if I had to choose I would take NEON.

Thank God I don’t have to choose and subscribe to both!

[Entrep]

Anyone tried Amazon Prime to any extent? I had a free trial but the app was AWFUL on my Amazon Fire puck (weird, I know). I couldn't work anything out and didn't watch much/anything.

[tga_trader]

Still not as good as the Netflix UI in some areas....but I wouldn't personally describe it as a "pile of shyte".

Agreed - current NEON platform is dogsh!t
Glad to see that you've come around :t_up:

Anyone tried Amazon Prime to any extent? I had a free trial but the app was AWFUL on my Amazon Fire puck (weird, I know). I couldn't work anything out and didn't watch much/anything.
I got it a while back purely to watch The Grand Tour. There was no crashing issues at all, and UI was OK, but severe lack of content. I need to watch the last season of Grand Tour, and want to check out 'The Boys', so I'll have to try it again.

[mistaTea]

Glad to see that you've come around :t_up:



:eek2: Nothing like having my past comments thrown in my face! And where did I go wrong? I said dogsh!t - not a "pile of shyte". There is a difference! *nervous laugh*

Relative to Netflix - the NEON app is very average in terms of usability. Describing it as 'dogsh!t' relative to the superior Netflix app is just colourful language on my part. I have never had issues with the app crashing or forgetting my place etc like other users have reported. It works great for me...functionally.

NEON works okay - but Sky need better than Ok. And it's the little things that add up. For example, if I stop watching an episode or movie part way through...when I go back into the app I should be able to resume watching from where I left off with one click like I can with Netflix.

There are a number of things like that which annoy me about NEON...it's functional, gives me a reliable stream of great content BUT is lacking in key areas.

I think I have been reasonably consistent about my Sky streaming criticisms in the past.

And don't get me started on the fact I still have no AppleTV NEON app :( Compounding this issue is the fact that NEON only supports the worst version of Airplay. Once I start playing a show and Airplaying it to my AppleTV...I can't minimise the iPhone app so that I can use my phone.

I mean, Christ Almighty! What is the world coming to when a man can't surf the web while watching his stories?!


Still, it could be worse. I had the misfortune of being locked into a Vodafone TV contract for 12 months a while back. Now that platform is, without any doubt, an absolutely stinking piece of cr@p. Functionally ok...reliable stream. But Jesus Christ Almighty on a Unicycle!...to try to navigate around that UI...I couldn't get rid of it fast enough.

[tga_trader]

NEON works okay - but Sky need better than Ok. And it's the little things that add up. For example, if I stop watching an episode or movie part way through...when I go back into the app I should be able to resume watching from where I left off with one click like I can with Netflix.

There are a number of things like that which annoy me about NEON...it's functional, gives me a reliable stream of great content BUT is lacking in key areas.

To be fair, Disney, with its unlimited resources, brought out their app with a ton of bugs, and lacking some of the most basic features. Netflix has already done the hard yards testing and tuning, for everyone else it should be easy.

[mistaTea]

To be fair, Disney, with its unlimited resources, brought out their app with a ton of bugs, and lacking some of the most basic features. Netflix has already done the hard yards testing and tuning, for everyone else it should be easy.

It’s all relative. If there was no such thing as NETFLIX I would be saying NEON is super wonderful, no complaints at all - just happy to have a cheaper alternative to a big satellite bundle. UX is way better than MySky - can’t believe how lucky I am!

But NETFLIX does exist. And they are awesome.

And I am really excited to see the new service Sky role out in the coming months.

Sounds like I will start to get it for ‘free’ too since Spark provide my broadband

[peat]

Anyone tried Amazon Prime to any extent? I had a free trial but the app was AWFUL on my Amazon Fire puck (weird, I know). I couldn't work anything out and didn't watch much/anything.
yes I have prime but on an Apple TV. It worked well on a different device with just the Sony TV app. It's cheap as chips and has some okay stuff - I loved that Fleabag show, Prime is worth it just for that. Currently not on Netflix but will be soon again when I decide to watch The Irishman and S3 of The Crown.

[bull....]

It’s all relative. If there was no such thing as NETFLIX I would be saying NEON is super wonderful, no complaints at all - just happy to have a cheaper alternative to a big satellite bundle. UX is way better than MySky - can’t believe how lucky I am!

But NETFLIX does exist. And they are awesome.

And I am really excited to see the new service Sky role out in the coming months.

Sounds like I will start to get it for ‘free’ too since Spark provide my broadband

neon will never be that big or good otherwise it will cannabilise there main product. which we all know is a dying monster anyway , priced so high to milk the last remaining suckers left on the service. i mean who pays $25 per month for a starter pack that is 90% free to air channels anyway lol

[mistaTea]

neon will never be that big or good otherwise it will cannabilise there main product. which we all know is a dying monster anyway , priced so high to milk the last remaining suckers left on the service. i mean who pays $25 per month for a starter pack that is 90% free to air channels anyway lol

I discussed the high satellite pricing with the CEO and CFO a few months back. I pointed out that instead of offering big freebies up front for new business, and then aggressive discounts to hold on to customers when they are out of contract and (understandably) want to leave... they should just offer more competitive pricing in the first place.

For example, if you want Sport... you have to pay about $72/month normal price. But they usually give you Starter + Sport free for one month, and free MySky for 3 months if you are a new customer. That up front discount is the equivalent of roughly $9/month.

If they just dropped the monthly price by $9 it would be $63/month. I reckon they could dig a little deeper and offer a Sports Package (Starter + Sport + MySky) for $59.99. And then make it cheaper to add additional bundles. Let them have Movies + SOHO for an extra $20/month if they already have the Sport package etc...

They listened to my feedback and nodded in all the right places, but have not shifted on satellite pricing. Not one bit.

I spoke with the CFO some more about this, referring back to the example I just gave. He just kept pointing out that you can get Sky Sport NOW for $39.99/month and NEON for $13.95 (total $53.94/month for a Sport and Entertainment bundle from Sky...).

So, what does that tell me? I think they absolutely are going to make NEON a world class and competitive product...because clearly they are not trying to prolong their satellite base for any longer than they have to. And they could never make the satellite packages cheap relative to Netflix anyway. Obviously they don't want all of their satellite customers to cancel tomorrow...because they are still gearing up for the big transition. But I think they want to wrap the satellite distribution model up very quickly. Maybe within the next 5 years.

I think they will beef up NEON so that you can add additional packages to the base Movies + Box Sets. And allow Pay Per View for their Box Office movies.

Or they are beefing up Sky Go so that they can offer that as a stand-alone product (with cheaper bundles, no MySky fees).

Or a combination of both.

[blackcap]

I like what you say there MistaTea, however I have a question about SKYGO.

I was on holiday staying at my brother's place earlier in the month. I tried to watch some sports on SKYGO but it was terrible. Tennis is impossible to watch as you just cannot follow the ball and it buffers or jitters and cricket the same. There is no way they should ditch the satellite business if SKYGO is in the state it is in now. Movies are fine, but sports is just not up to it.

[Dlownz]

I like what you say there MistaTea, however I have a question about SKYGO.

I was on holiday staying at my brother's place earlier in the month. I tried to watch some sports on SKYGO but it was terrible. Tennis is impossible to watch as you just cannot follow the ball and it buffers or jitters and cricket the same. There is no way they should ditch the satellite business if SKYGO is in the state it is in now. Movies are fine, but sports is just not up to it.

One of the problems with streaming Blackcap is not always the broadband or the streaming app ie sky go. Spark found it too and we're slammed for some thing which I believe had nothing to do with them (most of the time). Stock standard modems from providers arnt fit for purpose. They can't handle too many devices connected and also the device being used might also not be up to standard. I used to stream sky go through my laptop and it was terrible. Now I mirror cast it from a android phone ( now you can cast it normally). It's always perfect for me now. Spend a bit of money on a great router and you'll be away laughing.

[mistaTea]

I like what you say there MistaTea, however I have a question about SKYGO.

I was on holiday staying at my brother's place earlier in the month. I tried to watch some sports on SKYGO but it was terrible. Tennis is impossible to watch as you just cannot follow the ball and it buffers or jitters and cricket the same. There is no way they should ditch the satellite business if SKYGO is in the state it is in now. Movies are fine, but sports is just not up to it.

As I don't have satellite I don't have SkyGO...so I have limited experience with the app. I remember a while back watching some Sport on a friends SkyGO and don't recall any problems...

However, your comments are interesting and reinforce some of my current thinking.

I have suspected that even though they have made a lot of improvements to SkyGO over the years, it is still not up to snuff. Hence why they have not offered the product as a stand alone yet. If you suddenly had 500,000 logging into SkyGo to watch a big AB's match - I reckon jittering and buffering would be the least of their worries.

They seem to still be enhancing the app (like the recent move to allow Chromecasting...). So I don't think they are necessarily ditching the current platform for a new one. Part of the funds they have retained (instead of paying a dividend - a move I wholeheartedly support btw) will be used to improve SkyGO.

If I am right then I believe we should see SkyGO as a standalone cheaper option coming soon.

The other part of the story for Sky is that they need to negotiate further with their content providers so that they can offer better bundles at attractive price points. Since they are moving away from satellite they just need to renegotiate the streaming component of their contracts.

Even if they offer SkyGO as a standalone...if they are still going to insist on a $25 entry fee for Starter it will remain somewhat of a hurdle. I mean that is damn neat $4/month more than the most expensive NETFLIX 4K option...and you are providing channels most people either don't want or can get on Freeview (as bull.... has pointed out).
And since customers will BYOD and there zero set up costs for Sky (like the costs they incur sending out decoders, installing or adjusting satellites etc) there should be no need for bullsh!t entry fees in their streaming offering.

If you just want SOHO, for example, ideally you should be able to sign up online and just subscribe to that channel for $9.99 if you want. Have smaller add-ons and let the consumer decide which channels to add. Incentivise customers to add more content by offering discounts to the Ticket Price when customers are adding to existing bundles (i.e reward loyalty with $$$ savings).

As I say, this would require the content providers to be more flexible though. They pretty much dictate how the current bundles go for Sky.

[mistaTea]

One of the problems with streaming Blackcap is not always the broadband or the streaming app ie sky go. Spark found it too and we're slammed for some thing which I believe had nothing to do with them (most of the time). Stock standard modems from providers arnt fit for purpose. They can't handle too many devices connected and also the device being used might also not be up to standard. I used to stream sky go through my laptop and it was terrible. Now I mirror cast it from a android phone ( now you can cast it normally). It's always perfect for me now. Spend a bit of money on a great router and you'll be away laughing.

Yeah that is a really good point too.

I felt for Spark towards the end of the tournament. I think they actually did a really good job overall...but they had to send techies out (at Spark's cost) to some of the customers that had ongoing issues.

And in most cases the customer setup was absolutely horrendous. Not Spark's fault at all - yet they got BLASTED on social media.

I refused to join in on the cacophony at the time...because I know that Sky are going to have to deal with many of the same issues. Most people are reasonably switched on with internet tech now... but there are still many people who are ignorant. And I don't mean that in a horrible way...just pointing out that there are large number of people (typically the older generation) who really do struggle with streaming.

[blackcap]

One of the problems with streaming Blackcap is not always the broadband or the streaming app ie sky go. Spark found it too and we're slammed for some thing which I believe had nothing to do with them (most of the time). Stock standard modems from providers arnt fit for purpose. They can't handle too many devices connected and also the device being used might also not be up to standard. I used to stream sky go through my laptop and it was terrible. Now I mirror cast it from a android phone ( now you can cast it normally). It's always perfect for me now. Spend a bit of money on a great router and you'll be away laughing.

Ahha that may explain things. But my laptop is a pretty good model so it should not hinge on that. That said my at my brother's place it was on his broadband, on the wifi, and he does live about 7km out of town so that may have something to do with it? That said the series and films had no problems at all. Even then, if you need to upgrade your router to get a good reception on SKYGO to watch sports I am sure not many customers would be that impressed.

[Dlownz]

Ahha that may explain things. But my laptop is a pretty good model so it should not hinge on that. That said my at my brother's place it was on his broadband, on the wifi, and he does live about 7km out of town so that may have something to do with it? That said the series and films had no problems at all. Even then, if you need to upgrade your router to get a good reception on SKYGO to watch sports I am sure not many customers would be that impressed.

Laptops can be quite tempermental. They might be able to stream Netflix fine because it downloads aheas of what's needed. But sky runs on downloading as it's needs. Unless it's a gaming pc generally they can't handle it as well. Had a desktop computer and got given a graphics card. It was amazing Shame the computer only handled it for 2 weeks lol.

[blackcap]

Laptops can be quite tempermental. . Unless it's a gaming pc generally they can't handle it as well. l.

But surely that negates the whole streaming of sports market out there? If your laptop can't handle it then how do ppl stream sports?

[Dlownz]

But surely that negates the whole streaming of sports market out there? If your laptop can't handle it then how do ppl stream sports?

Chromecast is one of the cheapest and easiest ways to do it. Plus you can take it anywhere as long as you have WiFi and a phone to start the stream.