Big drop in Sky subscribers

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Awrrr
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#1550930 11-May-2016 14:59

If the complaint is about my use of the term 'gouging', I am happy to withdraw that and substitute something else, like 'robust pricing policy'. Whatever the terminology, I think Sky charges too much for what they provide, and apparently a lot of others agree.

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MikeB4

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#1550938 11-May-2016 15:03

Rikkitic:

If the complaint is about my use of the term 'gouging', I am happy to withdraw that and substitute something else, like 'robust pricing policy'. Whatever the terminology, I think Sky charges too much for what they provide, and apparently a lot of others agree.

Another way to look at is, the suppliers to Sky eg Fox, Disney, Optus etc etc charge sky too much.

Here is a crazy notion, lets give peace a chance.

ockel

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#1550959 11-May-2016 15:22

jarledb:

Its not really a market when there is just one provider of the content. Its when you have multiple providers of the same content that you have a real market competition going on.

So House of Cards...... monopoly provider? Not real market competition, huh? Everyone has stated that they have a policy of obtaining exclusive content. So no real market competition.

There is, however, real market competition for content - plenty of providers, always has been. Even sport. But peoples problem comes back to exclusivity of content. Each and every provider obtains exclusive content to attract and retain subscribers. Every single one.

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MikeAqua

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#1550963 11-May-2016 15:28

It's an interesting point - how do you measure value in video content?

Maybe $/hour of original viewing is a fair metric.

I watch roughly 60 hours of Sky per month so it's roughly ~$1/hour.

Mike

ockel

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#1550968 11-May-2016 15:39

MikeAqua:

It's an interesting point - how do you measure value in video content?

Maybe $/hour of original viewing is a fair metric.

I watch roughly 60 hours of Sky per month so it's roughly ~$1/hour.

And believe it or not, you are the 2x the average person in NZ. The average person (not household but person) watched 60 minutes of Sky content per day in 2014 (I still eagerly await 2015 data - its not been put into the public domain).

So for the average 2014 ARPU of $80/month it works out, based on 2.4 people per household watching 72 hours of Sky per month, $1.11 per hour of viewing. Covers general, premium, sport and movies. A whopping $1.11 per hour. Show me anywhere else that you can get entertained for $1.11 per hour.

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Rikkitic

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#1550971 11-May-2016 15:46

It might be a good deal if a significant part of that hour wasn't taken up with extraneous rubbish. I'm not qualified to comment on sports content but most of the films are older than I am and at least some viewers end up watching them for a second or third or fourth time because as bad as that is, all the other options are worse. You accuse me of using a term like 'gouge' without any backing evidence, but here you are making a sweeping claim about $1.11 per hour 'entertainment' without breaking down what actually is entertainment.

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KrazyKid

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#1550972 11-May-2016 15:47

$/Hour viewed is an interesting metric.

Netflix: For me (and my Family - 4 peeps) maybe 90 hours per month. - so $0.17 per hour.

Fan Pass: (only me and only the highlanders game once a week) - $7.50 per hour

Youtube: Kids only (2 kids) 60 hours per month- free

Freeview/TV on demand (2 adults only) - 20 hours month - free

Sky: Don't have it

The take home here is that I am willing to pay a huge premium to watch a particular event, but not willing to pay very much for general viewing - a $1.00 per hour is to much.

(Oh and that my kids watch way to much on a screen and I should kick them off it sooner :) )

jarledb

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#1550975 11-May-2016 15:54

KrazyKid:

$/Hour viewed is an interesting metric.

Netflix: For me (and my Family - 4 peeps) maybe 90 hours per month. - so $0.17 per hour.

Fan Pass: (only me and only the highlanders game once a week) - $7.50 per hour

Youtube: Kids only (2 kids) 60 hours per month- free

Freeview/TV on demand (2 adults only) - 20 hours month - free

Sky: Don't have it

The take home here is that I am willing to pay a huge premium to watch a particular event, but not willing to pay very much for general viewing - a $1.00 per hour is to much.

(Oh and that my kids watch way to much on a screen and I should kid them off it sooner :) )

You should include the price of access (internet provider) to the Netflix, Fan Pass and Youtube prices if you are going to make a fair comparison with Sky.

Of course, if the use is Youtube/Netflix/Fan Pass and we make believe you have internet only for those services (which is not true) it ends up to less than 50 cents extra an hour for a $75 internet connection.

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Benoire

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#1550976 11-May-2016 15:55

Let's assume you only have access to the NZ Netflix catalog; how long would it take to go through the content to the point that you have watched all that interests you and you're only watching new episodes? The problem with comparing hours for online vs. Live TV is that Live TV has been going longer and you've most likely watched most of what was on, where as Netflix might have a load of stuff you haven't seen yet... How many hours do you expect to be on Netflix for once you're caught up and watching only the select items that interest you?

ockel

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#1550978 11-May-2016 16:08

Rikkitic:

It might be a good deal if a significant part of that hour wasn't taken up with extraneous rubbish. I'm not qualified to comment on sports content but most of the films are older than I am and at least some viewers end up watching them for a second or third or fourth time because as bad as that is, all the other options are worse. You accuse me of using a term like 'gouge' without any backing evidence, but here you are making a sweeping claim about $1.11 per hour 'entertainment' without breaking down what actually is entertainment.

Okay fair enough. I can break it down a little more but there have to be an increased level of assumptions about how one allocates ARPU (notably things like box rental, HD ticket etc).

But I can give granularity on viewership. I made a mistake on the average number of people per household earlier. Its not 2.4, its 2.7.

Bear in mind that this is live viewing - not live+1 or live+7 or "watched on the PVR weeks later".

Sport viewing (excluding ESPN) was 8.65 minutes per person per day (8.65minutes x 2.7 people x 365/12 =710 minutes of sport per household per month). 11.8 hours.
Movies viewing was 3.68 minutes per day (302 minutes per month per household). 5 hours. About 2 movies per month per household.
All other Sky viewing 48.76 minutes per day (about the same as TVOne but spread across all other channels). 4000 minutes per month. 66 2/3 hours.

If you just took a basic subscriber cost of $49/mth for a household - no extra stuff. It'd be $0.73 per hour of general entertainment.

If you took the $80 ARPU and proportioned the cost of a box rental ($18/mth) across actual viewing (movies gets 6%, sport gets 14%, all other channels at 80%). And you took the HD ticket and apportioned it across just movies and sport (the only real reason for getting HD given the paucity of HD channels). These are the big assumptions.

And the really really big assumption is there is no cross subsidy across the packages. Which is a lie but a simplification. However if you move ARPU from general to sport or movie then the price of general goes down while sport and movie increases.

The general entertainment "package" would be $49/mth less box of $14/mth going to sport/movie. Or $35/month. For its 66 2/3 hours of viewing per month per household.

The sport package would be $28/mth plus $2.55 allocation for the equipment plus $7 allocation for HD. $37.85/month for 11.8 hours viewing per month.

The movies would be $21/mth plus $1 allocation for the equipment plus $3 for HD. $25/month for 5 hours viewing per month.

Happy to be challenged on assumptions. Happy to be challenged on methodology. Happy to be challenged on logic.

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MikeAqua

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#1550980 11-May-2016 16:09

We record everything.

With SoHo, there are no ads during programmes.

With other channels I FF at 12x playback speed reducing an advert break to ~20 seconds.

I should note I very rarely watch anything more than once. So my 60 hours per month is almost all novel (to me) viewing.

I'm actually enjoying a lot of classic TV I have never watched (e.g. Gunsmoke, Perry Masonl) as well as new programmes like GoT, Billions, Hunters and Vinyl.

Rikkitic:

It might be a good deal if a significant part of that hour wasn't taken up with extraneous rubbish. I'm not qualified to comment on sports content but most of the films are older than I am and at least some viewers end up watching them for a second or third or fourth time because as bad as that is, all the other options are worse. You accuse me of using a term like 'gouge' without any backing evidence, but here you are making a sweeping claim about $1.11 per hour 'entertainment' without breaking down what actually is entertainment.

Mike

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Rikkitic

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#1551022 11-May-2016 16:50

This discussion is actually starting to make more sense. At least it is becoming clearer for me. What I realise is that it is not the cost per item that I find excessive, but the way things are packaged. If I could watch a film that interested me for a dollar or so an hour, I would not have a problem with that. What I have a problem with is paying $100 a month or whatever it is for a lump of stuff that may or may not contain something I actually want to watch. I am not prepared to pay that amount for any bundle. That is why I would never pay for Sky. What I like about streaming is that I can pick and choose what interests me. I realise that Netflix, Hulu, etc. are also bundles, but they are so much cheaper than Sky that it is not impractical to subscribe to two or three, especially as the content value is likely to be higher (greater density of watch-worthy content).

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ockel

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#1551032 11-May-2016 17:14

Rikkitic:

This discussion is actually starting to make more sense. At least it is becoming clearer for me. What I realise is that it is not the cost per item that I find excessive, but the way things are packaged. If I could watch a film that interested me for a dollar or so an hour, I would not have a problem with that. What I have a problem with is paying $100 a month or whatever it is for a lump of stuff that may or may not contain something I actually want to watch. I am not prepared to pay that amount for any bundle. That is why I would never pay for Sky. What I like about streaming is that I can pick and choose what interests me. I realise that Netflix, Hulu, etc. are also bundles, but they are so much cheaper than Sky that it is not impractical to subscribe to two or three, especially as the content value is likely to be higher (greater density of watch-worthy content).

Which is why I asked the question before - whats it worth to the person watching. Paying $100/month for something that you dont consume sounds silly in any instance. And that person would cease to pay for it. Basic economic rationale.

Someone said they only wanted 15 channels - and would only pay $1/channel to watch them. And resented getting 50 other channels that they dont watch. So what, that there are channels they dont watch. There are plenty of programs on Netflix and Lightbox and Hulu that an individual will never watch. Why resent having the content in the catalogue?

Its about what you watch and whether there is utility in the content consumed. 15 channels at $45/mth. Thats $3.28/month per channel. But the key question is not how many channels but how many hours per month consumed across those 15 channels. What does that work out in terms of value per unit consumed?

Someone else subscribes to Netflix, Amazon Prime and Hulu. Plus EPL and PSA Squash. Three general entertainment sources at $45/month. Two sports sources at $30/month. The key question is how many units of entertainment are consumed across the 3 sources. Is that value for money for the subscriber? In they only watch 1 hour per week across each of the three sources thats 13 hours per month and almost $3.50/hour viewing cost. Two sports for $30/month? How many hours - 1 game of EPL per week or more? How many hours of squash? Whats the cost of having those subscriptions per unit consumed.

The average person in the average household, based on their viewing habits, appears to be getting reasonable value for their content. QED. IMHO.

But I dont criticise either the viewer or their supplier based on whether I think their getting their utility. Everyones perception of value is different.

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tdgeek

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#1551062 11-May-2016 18:12

Sky has been here for years and years, so their platform is very much hardware based. Thats a cost. It seems a bit bizarre to compare Netflix with Sky, two totally different animals.One was born recently the other years and years and years ago. Instead of comparing Apple to Oranges, compare what Sky will be like when they decide to evolve to mainly SVOD. Then put them side by side, when they are using the same SVOD technology and what would be similar costs. Right now, off course Sky has higher costs, so off course they get passed on.

Which is why discussing what options Sky could have and how that could pan out. Which we did the other day here which was very enlightening.

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#1551098 11-May-2016 19:27

I'm not backing away from calling Sky out for price gouging.

If the definition of price gouging is "the act of retailers increasing prices when no alternative is available", then Sky currently fully meet this through their current practice of charging some subscribers more than twice what they are charging others for the same product, and getting away with it through the threat of stand down if the higher charged subscribers try to access the lower price. As I see it, that's 100% price gouging, pure and simple.

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