Will be interesting to see how many of the 130,000 active Lightbox subscribers that Sky purchased will stick with the merged Neon. I gave up SkyTV many years ago (too many ads, too expensive) so I can't believe I'm back as a Sky customer under Neon, however it does seem to provide a counter to Netflix given it has a number of good shows from HBO, AMC, Showtime etc. Spark will be billing me for Neon at 9.99 a month so I'm assuming Spark clips the ticket on that.
With any broadband plan there is always some churn (people moving house, people changing providers etc) and so there is some churn of the VTV bundled with broadband. However, there is *lower* churn on the broadband plans that have VTV bundled... so customers like the product and this is why we offer it!
That's the aim of the game peps. It's all about low churn as margins are tight in this business.
You gotta hook the customer in with as many free bonus add ons so you can keep then signed up for life.
Spark will be billing me for Neon at 9.99 a month so I'm assuming Spark clips the ticket on that.
I have pondered this too as I will also get my NEON added to my Spark bill fr $9.99.
I don't think Spark make any money on this. To clip the ticket in any meaningful way their wholesale deal with Sky would need to be, say, $8.99 per month. That would be only 64% of the normal retail price - which would seem like a staggering wholesale discount for Sky to offer.
I can't know what the arrangement is - but at best for Spark, I reckon Sky are charging them $9.99/month and they are just passing that cost on to consumers. That would represent about 72% of the normal retail price (which still seems like a staggering discount to me).
Alternatively, Sky may have offered Spark, say 15-20% off retail rates... and Spark are eating some of the cost. For example, Sky charge them $11.50 per customer...they eat $1.51 as the cost of providing another value-add to their customers to lower broadband churn and only charge $9.99 for the service.
I just can't see Sky making any money if they have offered a wholesale discount in the region of 30-35%.
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