SKT Sky Network Television Limited.

[Nasi Goreng]

Well the article in NBR today states that they plan to lose 45,000 subscribers this year. At $80 per month that is a reduction of $45M

They also state that they plan to gain 25,000 Neon customers. Cool. I think Neon is $20 a month so that's $6M.

It's understandable right now that costs are rising, more players equal higher costs as bidding goes up. This with a backdrop of a smaller number of customers is not good. Is this just the start? What if they lose 100,000 customers next year? There are not many businesses that can afford to drop that amount of revenue which really must be all profit as I can't imagine they have that many variable costs in the business.

[Zaphod]

Another important factor to take into account is that a proportion of those customers who have re-joined the service may have done so through the razor sharp deals that have been running of late and are therefore paying significantly less (up to 50%) than existing customers.

[Sideshow Bob]

I just think these guys are just so far out of touch. I'm sure John Fellet is a good guy, but he's been either COO or CEO since 1991.

When a company is the most unpopular/hated in NZ - you have to wonder, especially when are in the business of entertainment. Not like bloody insurance or oil companies, polluting the world.

http://www.nzherald.co.nz/business/n...ectid=11614783

The small price rise is symptomatic of this. Brings in relatively small extra revenue, but another nail to many subscribers.

[Longhaul]

Well much like refrigerators killed the ice industry, internet TV is going to kill Sky. The weird part is that they appear to have been blind-sided by a slow moving freight train.

[minimoke]

Well much like refrigerators killed the ice industry, internet TV is going to kill Sky.

Actually the ice industry today is huge. There is a demand for ice nearly everywhere.

[Zaphod]

Technically InternetTV is agnostic to the underlying transmission medium. Connections could be provided via satellite, copper, fibre, microwave links, or by carrier pigeon and despite the latency & packet loss introduced by the latter, the end result is that the content is still delivered to the customer which at the end of the day, is all they care about in terms of delivery.

I think the real battle here is being fought on a number of different fronts, such as linear v on-demand, original v purchased content, the battle against regionalised rights, price point etc. As others have highlighted, Sky has made moves into this arena via Neon and the IP-based on-demand service rolled out to the new decoders and while this is a good start, they have completed this too late and are perceived by the majority as still far too expensive. Their corporate malaise has tarnished their brand and reputation amongst consumers.

Sky's content providers also need a wakeup call with regards to pricing. HBO charge handsomely for regional rights to shows such as GoT, Homeland etc. and this needs to change very quickly. So even if Sky want to be nimble, they are facing significant hurdles from upstream suppliers. Sky could consider original content, but IMO they are too small a player to make this feasible.

Despite increasing content costs, IMO they should have taken this opportunity to stay prices or minimise the increase, instead it appears to be business as usual which is most disappointing.

On the InternetTV front some consolidation will undoubtedly happen. To watch the various shows you are interested in often entails subscribing to multiple services. This is still more cost effective than a standard Sky subscription, but invariably ends much higher than that enticing $12/month entry point for Netflix, Lightbox or other players in the market offer.

[Baa_Baa]

There is also the disintermediation and disruptive factor of major sporting franchises, including NZ and World Rugby (the Sky cash cows) realising that they don't need a content distributor in the internet on-demand age.

Anyone, including sporting franchises, can be their own content distributor leveraging multiple internet 'TV / video' channels, reaching out to the whole world, offering a pay-per view service at a minuscule fraction of the cost to viewers of current monopoly content distributors like Sky.

The rate at which Sky's content distribution model unravels will accelerate, it is most certainly not going away.

[macduffy]

So whats with SKT today, SP up 10c in a soggy market. Did it just get oversold or is there a new factor here?

[xafalcon]

There is also the disintermediation and disruptive factor of major sporting franchises, including NZ and World Rugby (the Sky cash cows) realising that they don't need a content distributor in the internet on-demand age.

Anyone, including sporting franchises, can be their own content distributor leveraging multiple internet 'TV / video' channels, reaching out to the whole world, offering a pay-per view service at a minuscule fraction of the cost to viewers of current monopoly content distributors like Sky.

The rate at which Sky's content distribution model unravels will accelerate, it is most certainly not going away.

Sky is not just a content distributor. Sky also provides the camera crew, all the equipment, commentary staff, backroom editing functions, primary transmission consolidation, advertising and promotion, support programming etc

AFAIK there is no other company in NZ that can currently step into this role, and Sky won't be offering an easy path of entry for any rivals

NZ is such a small market globally, there is little likelihood of an international company trying their luck in godzone

So content may be king, but without production capabilities it is of little value

[Big Blind]

So whats with SKT today, SP up 10c in a soggy market. Did it just get oversold or is there a new factor here?

I'm praying it's because they've bought the EPL rights from BeIN, given that I'm one of those stupid, lazy subscribers