Big drop in Sky subscribers

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#1551807 12-May-2016 21:58

ockel:

Neon is going HD. Sky admitted it underestimated demand - and most rights were purchased SD. It hasnt put a timeframe so no holding breath. After all it took 12 months longer than first advertised to deliver OnDemand.

Source: Screenscribe

I don't believe that it was a "demand" or suprised by UFB thing, I think it was a "People watch this SD crap on our sat service so we will be able to sell it to them online" type thinking, forgetting that TPB and other legit sites have the content in HD so the choice is an easy one to make.

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#1551813 12-May-2016 22:06

ockel:

tdgeek:

ockel:

Really good thought on the NowTV. I wondered why it hasnt been offered here. Originally just a rebadged Roku but now app'd across other platforms. Personally I think development cost would probably hamper it in a small market like NZ.

Launched in mid 2012 it has garnered nearly 1m subscribers by the end of 2015. Thats about 4% of UK households. That translates to about 65,000 NZ households. About $10m revenue per year just with the entertainment package. Less content costs and the cost of distribution. Could a project like that generate an acceptable Return on Capital for the development of the apps? Or would it end up being subsidised by the satellite business? Its like Lightbox being subsidised by Spark - parent throws $20-30m per year at the project, project needs ongoing subsidy from parent adinfinitum on the basis its used to reduce broadband subscriber churn. Where does Sky get that subsidy from the business? Cant say that it reduces churn on the satellite platform. Attracting only 4% of households doesnt make it a subscriber acquisition tool unless the project generates an acceptable ROIC on a standalone basis.

Wouldnt it be better to offer Neon across other platforms? And FanPass?

Isnt Neon kinda like Sky's answer to NowTV, without the need to offer live broadcasts of the content in a linear fashion?

Thats where I was heading. It all goes to an SVOD migration over time. Neon is Basic, perhaps via Neulion to make it a better service. I assume that as Neon is kept/restrained at SD and Fanpass is very good apparently.

Neon is going HD. Sky admitted it underestimated demand - and most rights were purchased SD. It hasnt put a timeframe so no holding breath. After all it took 12 months longer than first advertised to deliver OnDemand.

Source: Screenscribe

It does show the power of exclusivity.

Couple of interesting points

It didn’t launch the service in HD because it misjudged the uptake of streaming services in this market and the impact the rollout of UFB would have on demand.

Fair enough, as UFB has gone ahead of target. And streaming, as affecting Sky, has been pretty minimal at best, up till now.

It was also concerned Neon would cannibalise its satellite service and to minimise set-up costs, licensed rights in SD rather than HD.

Interesting. Fan Pass is cannibalising Sky Satellite which is Basic + Sport. I gather it was mitigating churn to a degree. Now, it might be Skys alternative to satellite sport, or part of a medium term migration to SVOD. Neon could take a role as Basic, with Neon+ being Basic with today's Neon add-on? Who knows.

Something has to happen, they don't have a capability just to slash prices.

richms

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#1551815 12-May-2016 22:10

tdgeek:

It was also concerned Neon would cannibalise its satellite service and to minimise set-up costs, licensed rights in SD rather than HD.

Interesting. Fan Pass is cannibalising Sky Satellite which is Basic + Sport. I gather it was mitigating churn to a degree. Now, it might be Skys alternative to satellite sport, or part of a medium term migration to SVOD. Neon could take a role as Basic, with Neon+ being Basic with today's Neon add-on? Who knows.

Something has to happen, they don't have a capability just to slash prices.

That has to be the dumbest excuse ever. The internet is cannibalizing their customers. Hop on or get run over.

Richard rich.ms

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#1551817 12-May-2016 22:13

richms:
tdgeek:

It was also concerned Neon would cannibalise its satellite service and to minimise set-up costs, licensed rights in SD rather than HD.

Interesting. Fan Pass is cannibalising Sky Satellite which is Basic + Sport. I gather it was mitigating churn to a degree. Now, it might be Skys alternative to satellite sport, or part of a medium term migration to SVOD. Neon could take a role as Basic, with Neon+ being Basic with today's Neon add-on? Who knows.

Something has to happen, they don't have a capability just to slash prices.

That has to be the dumbest excuse ever. The internet is cannibalizing their customers. Hop on or get run over.

Omg cables and routers are eating people, it's the end of days.

tdgeek

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#1551824 12-May-2016 22:29

richms:

tdgeek:

It was also concerned Neon would cannibalise its satellite service and to minimise set-up costs, licensed rights in SD rather than HD.

Interesting. Fan Pass is cannibalising Sky Satellite which is Basic + Sport. I gather it was mitigating churn to a degree. Now, it might be Skys alternative to satellite sport, or part of a medium term migration to SVOD. Neon could take a role as Basic, with Neon+ being Basic with today's Neon add-on? Who knows.

Something has to happen, they don't have a capability just to slash prices.

That has to be the dumbest excuse ever. The internet is cannibalizing their customers. Hop on or get run over.

That was my first impression,but not for your reason. The inter webs haven't had much effect on them till this year, as many have said here, they are/now were, sticky.

Neon looks ok, but aside from some really good series, I can't see it having any effect on current satellite subscribers. Bizarre.

ockel

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#1551868 13-May-2016 06:45

richms:

ockel:

Neon is going HD. Sky admitted it underestimated demand - and most rights were purchased SD. It hasnt put a timeframe so no holding breath. After all it took 12 months longer than first advertised to deliver OnDemand.

Source: Screenscribe

I don't believe that it was a "demand" or suprised by UFB thing, I think it was a "People watch this SD crap on our sat service so we will be able to sell it to them online" type thinking, forgetting that TPB and other legit sites have the content in HD so the choice is an easy one to make.

The key question for me will be HD pricing.

If Netflix charges 30% more for HD streaming over SD streaming, where will Neon pitch its HD price? $25/month for Neon HD vs $20/mth for Neon SD?

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#1552073 13-May-2016 11:36

Here in Oz, Foxtel are running a promotion where you can get Foxtel box IQ2 with free install and no contract, and free Platinum HD (the highest) package free for 3 months.

I've had mine for 2 and a half months and have just cancelled it ahead of the end of the free 3 months. Even at $0 it wasn't worth it as it's still mostly low bitrate SD, and everything is just full of ads. I don't watch free to air much, but when I do, I am sure there is less ads than the Foxtel channels. The only thing that looks any good is sport, and I am an occasional fan at best.

If someone else can manage to pry the decent sports rights away from Sky and Foxtel (and can actually produce and deliver), then Sky and Foxtel are toast. But I wouldn't be surprised if they end up, more or less, as specialist sport content providers some time in the future.

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#1552081 13-May-2016 11:44

Isn't this what they said this time last year? I don't believe HD is coming soon, until it actually arrives.

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#1552094 13-May-2016 12:01

ajobbins:

Here in Oz, Foxtel are running a promotion where you can get Foxtel box IQ2 with free install and no contract, and free Platinum HD (the highest) package free for 3 months.

I've had mine for 2 and a half months and have just cancelled it ahead of the end of the free 3 months. Even at $0 it wasn't worth it as it's still mostly low bitrate SD, and everything is just full of ads. I don't watch free to air much, but when I do, I am sure there is less ads than the Foxtel channels. The only thing that looks any good is sport, and I am an occasional fan at best.

If someone else can manage to pry the decent sports rights away from Sky and Foxtel (and can actually produce and deliver), then Sky and Foxtel are toast. But I wouldn't be surprised if they end up, more or less, as specialist sport content providers some time in the future.

Thats my pick. I doubt anyone else can provide a full sports package, as Sky also include commentary and other addons for local, or Kiwi oriented events. And if others provided individual sports on subscription, I doubt that would weigh up. And that removes a whole lot of convenience for the public

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#1552099 13-May-2016 12:11

tdgeek:

Thats my pick. I doubt anyone else can provide a full sports package, as Sky also include commentary and other addons for local, or Kiwi oriented events. And if others provided individual sports on subscription, I doubt that would weigh up. And that removes a whole lot of convenience for the public

Yes, I have to admit that Sky do a bang-up job of sports coverage, especially the rugby and cricket. That's why I shell out for Fanpass when the Black Caps are playing.

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#1552139 13-May-2016 12:45

littleheaven:

tdgeek:

Thats my pick. I doubt anyone else can provide a full sports package, as Sky also include commentary and other addons for local, or Kiwi oriented events. And if others provided individual sports on subscription, I doubt that would weigh up. And that removes a whole lot of convenience for the public

Yes, I have to admit that Sky do a bang-up job of sports coverage, especially the rugby and cricket. That's why I shell out for Fanpass when the Black Caps are playing.

The thing is Sky have a (near) monopoly on sport, and it's the only ace card they currently hold.

If they were to lose a big ticket item like the rugger, then bye Sky.

And, yes, they do a good job with it, but if another provider was to give access, say, to core games only at a cheaper price, how many would be prepared to forgo the additional commentaries and add-ons? A lot I reckon.

tdgeek

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#1552148 13-May-2016 13:00

dafman:

littleheaven:

tdgeek:

Thats my pick. I doubt anyone else can provide a full sports package, as Sky also include commentary and other addons for local, or Kiwi oriented events. And if others provided individual sports on subscription, I doubt that would weigh up. And that removes a whole lot of convenience for the public

Yes, I have to admit that Sky do a bang-up job of sports coverage, especially the rugby and cricket. That's why I shell out for Fanpass when the Black Caps are playing.

The thing is Sky have a (near) monopoly on sport, and it's the only ace card they currently hold.

If they were to lose a big ticket item like the rugger, then bye Sky.

And, yes, they do a good job with it, but if another provider was to give access, say, to core games only at a cheaper price, how many would be prepared to forgo the additional commentaries and add-ons? A lot I reckon.

If another did pick up the key sports, they will have to charge a key price. Say a big rugger game. But as thats a core game, the rest is on Sky, so will they cancel Sky to watch one core game that they have to pay for? No. Will they pay extra for that core game? yes, no choice, as your example has a monopoly. Its actually a monopoly caused by the game promoter. You would need one, or a few providers to cover the key sports. Then we would need to get a few subs to get what Sky had. I doubt that will save mega bucks, as at the end of the day, the same huge dollars are being paid to the few sporting owners, and we, the public, need to cover that. Should Sky disband Basic being required to get Sport, they should remove the subsidy, so Basic is cheap, and Sport is what it really costs, I suggest $60, as is NowTV sport option. Sky could say, combine Basic and Neon. Discount if you have Sport, lots of options to mess around with pricing, demand, stickability, convenience. I find all this fascinating. Market forces at work. Thats is, assuming this all plays out.

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#1552199 13-May-2016 14:01

tdgeek:

dafman:

littleheaven:

tdgeek:

Thats my pick. I doubt anyone else can provide a full sports package, as Sky also include commentary and other addons for local, or Kiwi oriented events. And if others provided individual sports on subscription, I doubt that would weigh up. And that removes a whole lot of convenience for the public

Yes, I have to admit that Sky do a bang-up job of sports coverage, especially the rugby and cricket. That's why I shell out for Fanpass when the Black Caps are playing.

The thing is Sky have a (near) monopoly on sport, and it's the only ace card they currently hold.

If they were to lose a big ticket item like the rugger, then bye Sky.

And, yes, they do a good job with it, but if another provider was to give access, say, to core games only at a cheaper price, how many would be prepared to forgo the additional commentaries and add-ons? A lot I reckon.

If another did pick up the key sports, they will have to charge a key price. Say a big rugger game. But as thats a core game, the rest is on Sky, so will they cancel Sky to watch one core game that they have to pay for? No. Will they pay extra for that core game? yes, no choice, as your example has a monopoly. Its actually a monopoly caused by the game promoter. You would need one, or a few providers to cover the key sports. Then we would need to get a few subs to get what Sky had. I doubt that will save mega bucks, as at the end of the day, the same huge dollars are being paid to the few sporting owners, and we, the public, need to cover that. Should Sky disband Basic being required to get Sport, they should remove the subsidy, so Basic is cheap, and Sport is what it really costs, I suggest $60, as is NowTV sport option. Sky could say, combine Basic and Neon. Discount if you have Sport, lots of options to mess around with pricing, demand, stickability, convenience. I find all this fascinating. Market forces at work. Thats is, assuming this all plays out.

Agreed.

I think they should cut the subsidy for sport from the Basic package. It'd be interesting to know how much this is, and whether or not they'd make it back by transferring it to the sub for Sport.

I'd imagine that if (say) the subsidy was $25/month from Basic to Sport, a percentage (maybe quite a high percentage ~10%?) would then drop Sport, and keep Basic at $25/month, meaning Sky has lost that revenue altogether making the pot smaller next time they go to bid for rights. Which will be why they haven't done it.

If Sky Basic ($50) + Sport (25) + HD (10) = $85 and Sky Basic (25) + Sport (50) and HD (10) = $85, do you think that all those people subscribed to those will keep them if the pricing model changed to the latter equation? I'm not sure they would. I know that if we still had Sky at home, and the model changed to the latter (or something like it) I would come under a heap of pressure to ditch sport, or only subscribe for the month that I needed it, meaning Sky's ARPU drops, and the pot is smaller for bidding for sports, starting a downward spiral.

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#1552214 13-May-2016 14:27

trig42:

If Sky Basic ($50) + Sport (25) + HD (10) = $85 and Sky Basic (25) + Sport (50) and HD (10) = $85, do you think that all those people subscribed to those will keep them if the pricing model changed to the latter equation? I'm not sure they would. I know that if we still had Sky at home, and the model changed to the latter (or something like it) I would come under a heap of pressure to ditch sport, or only subscribe for the month that I needed it, meaning Sky's ARPU drops, and the pot is smaller for bidding for sports, starting a downward spiral.

Whereas I, a non-customer, would be inclined to re-subscribe to Basic only at $25 per month. I guess it would depend on how many people are attracted by the basic package and would be happy to pay for it at the lower fee vs how many would ditch sport due to the extra cost.

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#1552218 13-May-2016 14:33

Oh, me too. I would probably re-subscribe at $25 a month (IF I could get HD and recording for that price).

But, I would not be subsidizing Sports, therefore Sky's ability to purchase all that sports programming would be impacted (unless, of course, no-one dropped Sport when the package price for Sport doubled, and the Basic halved).

Note: I would be happy to pay an 'Installation' or sign a term contract to get a MySky. I balk at paying $15 a month for it.

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