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  1. #2081
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    Quote Originally Posted by Ogg View Post

    No one is saying that this company is worth billions but it's a good cash cow that is selling for only $100m.
    I like a cash cow as much as the next man - a business that churns out cash and returns it to the shareholders.

    2020 : 0.00cps
    2021 : 0.00cps
    2022 : 0.00cps
    2023 : 0.00cps
    2024 : 0.00cps
    2025 : 0.00cps

    Those are my projections for the "milk" to be delivered in dividends by this cash cow in the near term.

    What are yours? Check back in 2025?
    ----
    Never try to teach a pig to sing. It wastes your time and annoys the pig.
    ----

  2. #2082
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    I’m in my early 30’s and attempted to become a Sky customer as an experiment. Looking through their website, I just can’t find anything compelling about the product. Everyone I know could easily afford to purchase a sky sub, but they don’t. Instead they use a chromecast and stream content on demand. I lived in a flat with Sky once, this was in 2010. We got it to watch the football World Cup and cancelled it shortly afterwards. The only group of people I do know who have a traditional Sky sub are in their 60’s. Granted this is just a personal perspective, but I just can’t see any longevity in SKTs traditional business model. It’s streaming services look more promising but are currently such a small percentage of earnings. Interesting times, but I can’t buy the product or the share. Good luck to holders.
    Last edited by huxley; 08-04-2020 at 05:39 AM.

  3. #2083
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    Quote Originally Posted by Stranger_Danger View Post
    I like a cash cow as much as the next man - a business that churns out cash and returns it to the shareholders.

    2020 : 0.00cps
    2021 : 0.00cps
    2022 : 0.00cps
    2023 : 0.00cps
    2024 : 0.00cps
    2025 : 0.00cps

    Those are my projections for the "milk" to be delivered in dividends by this cash cow in the near term.

    What are yours? Check back in 2025?
    ..at least the projected divies aren’t declining
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  4. #2084
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    Quote Originally Posted by mistaTea View Post
    Sky TV is a company I am able to understand. My investing style is one of a consolidation approach. To me it makes no sense to diversify and put a bunch of money in my, say, 30th 'best idea' when I have an opportunity to acquire more of my 1st best idea at a large discount to intrinsic value. In that respect I am a worshiper of the Church of Munger, and Charlie is my Cult Leader.
    I am a bit of a Munger/Buffett disciple myself. I agree that it doesn't make much sense to put a lot of effort into your 30th best idea. But what about your second best idea? I don't see Buffett and Munger going all in on one horse.

    Quote Originally Posted by mistaTea View Post
    It is also important to note that risk does not equal volatility.
    Risk = not knowing what you are doing. Time will either prove that I do know what I am doing when it comes to Sky, or that perhaps I didn't understand the business as well as I thought I did.

    I continue to like the business, and the story has not changed at all from when I first invested in the company. If the story changes, naturally I will review my position. Until then, if Mr Market keeps offering equity in the company for what I believe are low prices relative to intrinsic value, I will keep buying more.
    I am not suggesting that you don't know what you are doing MistTea. FWIW, I don't accept the 'Stranger Danger' theory that because 18 years olds are not signing up you should get out of Sky. I do accept the macro argument that SD makes that 'eventually' Sky in its current format will disappear. But I do think there is money to be made by Sky in the transition phase (which might be twenty years). And, of course Sky is adapting to the new environment. The Sky business model is not set in stone.

    Where I think your 'laser focus' on Sky is letting you down MistaTea is that this COVID crisis has thrown up other opportunities in other industries. These opportunities were not there a month ago. But you can't see them, because you are not looking. By not looking at other opportunities you are increasing your 'portrfolio' risk in a way that is not only unnecessary, but is also not prudent, IMO.

    SNOOPY
    Last edited by Snoopy; 08-04-2020 at 06:58 AM.
    Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7

  5. #2085
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    Quote Originally Posted by Stranger_Danger View Post
    With the greatest of respect, I'm not sure you understand Sky TV as well as you think you do.
    You may well be right.

    Quote Originally Posted by Stranger_Danger View Post
    You may understand it as a company, a balance sheet, a management team, all of these things in and of themselves, but the key to how this investment is performing and will likely turn out is to understand Sky TV in relation to the world around it.
    One cannot claim to 'understand' the business unless they also understand the wider industry, who the customers are, changing attitudes and tastes etc. It is not enough to just understand the Balance Sheet, I agree. To the best of my ability I have tried to build up as big a picture as I can about Sky TV, including issues around piracy.

    Quote Originally Posted by Stranger_Danger View Post
    When I've raised piracy options, you typically respond to it as a moral issue. And as a moral issue, you win, piracy is stealing etc etc.
    It sure does baffle me when I think you can get HBO, Showtime, FX and much more legally from Sky for 45c per day. Why anyone would want to take on the moral hazard of stealing when content has never been so cheap is bizarre.
    But it can baffle me all it likes - the reality is people do steal content (either by outright stealing by torrenting on sites like Pirate Bay etc or using VPNs to grab content that sits behind a paywall in NZ but is free in other jurisdictions).

    A few years back I think it was John Fellet who pointed out that Netflix is not Sky's biggest competitor - piracy is. Hence Sky taking legal action to try and stamp it out (futile imo - and new management has been a lot quieter on this front than the previous gang). At the time I remember people just giving the polite smile we reserve for dotards - it didn't suit the narrative at the time about Netflix being the Cable TV Killer (in our case, Satellite TV).
    But it remains true, Piracy is the largest competitor. And it's not just the stereotypical pimply faced 18 year old who is holed up in his room hacking websites instead of going out drinking and trying to get a leg over with some girl! I know people in their forties who have exploited software like Plex to provide a very user friendly platform to surface their stolen content. They are then able to share their libraries with their mates.

    It is a problem. It always has been a problem, and it always will be.

    But...

    I also think it is a mistake to think that because Piracy is a real issue that therefore Sky TV has no future. Not every 'young person' has the ability nor inclination to maintain feeds that pull in content (of varying quality sometimes) from a range of sources. Paying someone a 'reasonable' (low) fee to guarantee quality and provide the content in a nice UI is still the preference of many I believe. Netflix has been an amazing success despite the fact that people can easily Pirate.

    My view is that, with the plethora of individual Netflix-style services entering the market - there is still a place for a good content aggregator. Time will tell if Sky become that aggregator for NZ - but you would have to say that they are in the best position compared to others to become that player. They are right to invest heavily in streaming - it will provide them an ability to integrate with the likes of Netflix and also sell their traditional bundles for cheaper.

    If they could increase subs between their NZ operation and RugbyPass to 1.5M customers, even if the ARPU was only $50 that would still be $900M of revenue a year.
    And that is not ridiculous in my view, because despite Piracy being a major problem, Sky is actually growing their customer base.

    2015: 851,561
    2016: 852,679
    2017: 824,782
    2018: 767,727
    2019: 778,740
    2020: 950,000? (Big jump in part from Lightbox acquisition - 130,000 subs - but also more organic growth as people ditch satellite in favour of streaming).

    If everyone under a certain age was pirating and refused to pay for their content I think Sky TV subs would only go one way - down. Regardless of whether they stream or stick to satellite.

    On a final note - my expectation is that their streaming services will continue to grow (especially when their new services are rolled out soon) but at the same time I think they will maintain hundreds of thousands of satellite customers. The 'oldies' you refer to. You are right that they are far less likely to ditch the satellite service they are used to for a new streaming service. That provides Sky with a large base of high-paying subscribers which ease the financial pressure that comes from transitioning to a cheaper streaming business until you hit a critical mass of subscribers.

    I really enjoy the discussion! Thanks for taking the time to post a thoughtful and well-articulated argument.

  6. #2086
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    IMO SKYTV best bet is to buy a cheap ISP and use their retail to sell/support

  7. #2087
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    Quote Originally Posted by Snoopy View Post
    I am a bit of a Munger/Buffett disciple myself. I agree that it doesn't make much sense to put a lot of effort into your 30th best idea. But what about your second best idea? I don't see Buffett and Munger going all in on one horse.
    Munger often brags that he only owns 3 investments - Berkshire, Costco and Li Lu. A little disingenuous given Berkshire is a massive holding company, but I still take the man's point!
    You only need a handful of really good ideas to do well over time in this business.


    Quote Originally Posted by Snoopy View Post
    Where I think your 'laser focus' on Sky is letting you down MistaTea is that this COVID crisis has thrown up other opportunities in other industries. These opportunities were not there a month ago. But you can't see them, because you are not looking. By not looking at other opportunities you are increasing your 'portrfolio' risk in a way that is not only unnecessary, but is also not prudent, IMO.

    SNOOPY
    That is one possibility, sure.

  8. #2088
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    Fascinating arguments from an investment point of view both for and against. I for one loathed them as a customer especially when Fellet was in charge where they missed the trick by not aligning themselves to be proactive and be future ready. Instead they just been greedy with their monopolistic situation and hung onto their dollars. And paid price over recent years and got themselves into current debacle. Not their customer anymore, but the new CEO Martin seem to be making his best effort to turn this around, but is it too late? time will tell.

    Disc-Not a holder.

  9. #2089
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    An issue is also the way the content is disappearing for sky....Disney...Netflix (who make there own content)….What happens when the BBC finally decided to setup there own streaming service, all those over 60s will have nothing to watch.

  10. #2090
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    Quote Originally Posted by ScrappyO View Post
    An issue is also the way the content is disappearing for sky....Disney...Netflix (who make there own content)….What happens when the BBC finally decided to setup there own streaming service, all those over 60s will have nothing to watch.
    No different to NZ Cricket. Have no idea how they are going to get coverage to the non-tech savvy population now with the demise of radiosport and all NZ based cricket from next summer forward being broadcast on spark sport.

    Great discussion, as I have already mentioned in this thread, I have previously been a satellite subscriber, tried Sky Sport Now over summer but will head back to satellite when sport starts up again as the product is superior. Going to put my money where my mouth is as I just put in a small buy order for SKY Lets see how this pans out.

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