SKT Sky Network Television Limited.

[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-c...wns-worldwide/