SKT Sky Network Television Limited.

[mistaTea]

skyNZ supporting this dog of a tv would be going entirely against their targeted lean operation model, and would tie up large amounts of capital & cashflow. They have to buy the inventory, store it somewhere, deliver it, install it, service it, hold warranty expense, and any units they sell on monthly rental/payment plan takes years to cover the cost of. Not to mention they would have to pay a royalty to Comcast.

im not at all wowed by the technology - it’s standard or behind what other tv brands offer, but doesn’t offer the full range of streaming services available.

Well geez! That is a damning indictment indeed!

I just wish Patrick Delany had of called you first before he went ahead and made such an incredible error of judgement...

[bottomfeeder]

skyNZ supporting this dog of a tv would be going entirely against their targeted lean operation model, and would tie up large amounts of capital & cashflow. They have to buy the inventory, store it somewhere, deliver it, install it, service it, hold warranty expense, and any units they sell on monthly rental/payment plan takes years to cover the cost of. Not to mention they would have to pay a royalty to Comcast.

im not at all wowed by the technology - it’s standard or behind what other tv brands offer, but doesn’t offer the full range of streaming services available.

I like the idea however, provided that it is at the peak of technology at a reasonable price. But coming down to the nitty gritty, they may be better partnering with an existing retailer, as I feel current technology could be adapted.

[Getty]

According to an article in todays Herald, Derek Handley is not just reaching for the Sky, he's off to the moon!

https://youtu.be/tWc5kD6Fa_c

[RTM]

Completely agree.
I bought an expensive Panasonic TV a few years ago. When SPARK SPORT came along...I found it was 6 months to old to accept that app. Similarly with SKY SPORT. So now I have gotten over my initial annoyance and am happy to have the expensive TV...which I still like. And feed it via APPLE TV (I'm on my 2nd one) , PlayStation, FreeView box, PC or whatever. Seems way more efficient than replacing an expensive TV every time technology moves on.
Not a goer for me. And can't figure out what would make it so.

skyNZ supporting this dog of a tv would be going entirely against their targeted lean operation model, and would tie up large amounts of capital & cashflow. They have to buy the inventory, store it somewhere, deliver it, install it, service it, hold warranty expense, and any units they sell on monthly rental/payment plan takes years to cover the cost of. Not to mention they would have to pay a royalty to Comcast.

im not at all wowed by the technology - it’s standard or behind what other tv brands offer, but doesn’t offer the full range of streaming services available.

[mistaTea]

Completely agree.
I bought an expensive Panasonic TV a few years ago. When SPARK SPORT came along...I found it was 6 months to old to accept that app. Similarly with SKY SPORT. So now I have gotten over my initial annoyance and am happy to have the expensive TV...which I still like. And feed it via APPLE TV (I'm on my 2nd one) , PlayStation, FreeView box, PC or whatever. Seems way more efficient than replacing an expensive TV every time technology moves on.
Not a goer for me. And can't figure out what would make it so.

Not a goer for you as you do not need a new TV...you are sorted with your current setup.

But people are replacing TV's every day. And Sky Glass is potentially attractive to those people who need/want a new TV set...

[LaserEyeKiwi]

Well geez! That is a damning indictment indeed!

I just wish Patrick Delany had of called you first before he went ahead and made such an incredible error of judgement...

Just look at the cashflow math to see how bad this would be for SkyNZ:

Let’s say they adopt this and can get 10,000 subscribers to sign up for the monthly rental of these TVs:

Assuming a $2000 upfront cost for Sky (unit cost, international transport, inventory storage, home delivery, installation). That does not include royalty to comcast and allowance for unit failures etc.

10,000 x $2000 = $20 million upfront cost for Sky per quarter, which would be $80 million annualized.

Let’s be generous and presume Sky can get $20 a month rental from subscribers for these TVs. That means Sky would receive $600,000 per quarter (10,000 x $60 per quarter), or $2.4 million per year from every 10,000 subscribers.

So it would take 8 years for Sky to recoup the upfront cost of each tv if they could rent them for $20 a month. And that doesn’t include cost of capital, customer churn, failure rates, and royalties to Comcast.

The math is fine for a large cashed up company with plenty of cash on hand (it reduces cash but adds to ongoing revenue), but Sky NZ is not in that sort of position.

SkyNZ has literally just launched a high upfront cost product (Sky Broadband) that will be cashflow negative for a couple of years, the last thing it needs is another massive negative cashflow product tearing up its balance sheet.

[mistaTea]

Just look at the cashflow math to see how bad this would be for SkyNZ:

Let’s say they adopt this and can get 10,000 subscribers to sign up for the monthly rental of these TVs:

Assuming a $2000 upfront cost for Sky (unit cost, international transport, inventory storage, home delivery, installation). That does not include royalty to comcast and allowance for unit failures etc.

10,000 x $2000 = $20 million upfront cost for Sky per quarter, which would be $80 million annualized.

Let’s be generous and presume Sky can get $20 a month rental from subscribers for these TVs. That means Sky would receive $600,000 per quarter (10,000 x $60 per quarter), or $2.4 million per year from every 10,000 subscribers.

So it would take 8 years for Sky to recoup the upfront cost of each tv if they could rent them for $20 a month. And that doesn’t include cost of capital, customer churn, failure rates, and royalties to Comcast.

The math is fine for a large cashed up company with plenty of cash on hand (it reduces cash but adds to ongoing revenue), but Sky NZ is not in that sort of position.

SkyNZ has literally just launched a high upfront cost product (Sky Broadband) that will be cashflow negative for a couple of years, the last thing it needs is another massive negative cashflow product tearing up its balance sheet.

Sure, that would be a very bad thing for cashflow if all of the many assumptions you have made are correct.

I guess where I am coming from is that I think Sky Glass is a neat concept. It is my expectation that SNT discuss the technology with Comcast and our friends at Foxtel to understand the opportunity more.
If the math behind any deal for SNT just doesn't make sense, then we take a pass on it. We have a shiny new STB coming that is going to be the ultimate aggregator anyway and offers hybrid satellite/streaming capabiluty (which will remain a key selling point for Sky when negotiating sports rights as we are still the only business that can reach 100% of NZ homes).

I just don't think we should rule out Sky Glass right away without fully assessing the opportunity and whether we think it will add value to the business.

[mikelee]

I'm sure Sky's bean counters can do the math too, so that executives can make the best decision for the business.

[RTM]

Not a goer for you as you do not need a new TV...you are sorted with your current setup.

But people are replacing TV's every day. And Sky Glass is potentially attractive to those people who need/want a new TV set...

Even if I was looking for a new TV, it would not be a factor. As 6months, 1 year, 2 years down the track there will be something that I want that won’t run on it. I’ve learnt my lesson. Buy a decent screen, then feed it via whatever HDMI you want to. Not an option for me at all. But there you go…we are not all the same.

I would be disappointed to see them go down this route.
Disc: Holder.

[mistaTea]

Even if I was looking for a new TV, it would not be a factor. As 6months, 1 year, 2 years down the track there will be something that I want that won’t run on it. I’ve learnt my lesson. Buy a decent screen, then feed it via whatever HDMI you want to. Not an option for me at all. But there you go…we are not all the same.

I would be disappointed to see them go down this route.
Disc: Holder.

Well, it would only be disappointing if they went down this route based on unfavourable terms and uptake of the product was low.

I am astounded that you guys have just completely shut your minds off to the idea. Don’t even want management to take a look at it!

I am not saying I am for or against Sky Glass. I have simply stated that I would expect management to look into it and see if it could be a value add. Especially since Foxtel clearly think it is.

If it’s not a good deal for SNT, so be it. We take a pass on it.

What is the rationale for SNT not even being open to the possibility? They should always be on the look out for new opportunities that could enhance their position as preferred aggregator. Not all opportunities will end up going ahead…but they should keep searching anyway…