Sky blames piracy for lost customers. Sky: it's time to wake up and smell the coffee.

Forums › Sky, Neon, Lightbox › Sky blames piracy for lost customers. Sky: it's time to wake up and smell the coffee.

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#1854534 29-Aug-2017 08:34

tdgeek:

I have never seen that put forward. Its common knowledge that broadcasters bid for rights, and common knowledge that Sky isn't always the top bidder or will pay the asking price.

Bad editing sorry, I meant to quote this directly:

shk292: There is, in my opinion, a false assumption from the supporters of Sky in this debate - and that is that sports rights cost what they cost, and this has to be paid.

I actually think that the costs of sport, especially rugby in NZ, has been fuelled by Sky bidding to win it exclusively, because without it they would die. They know (incorrectly or otherwise) that they have a captive market, including those who pay for Basic and subsidise Sport. So, they can afford to pay huge sums for sports rights and pass these on to the customers.

What if they didn't do this? What if Sky currently pay $100M for NZ Rugby (a number I just made up), then they go out of business next month and the next highest bid for rugby rights is $40M from TVNZ or Amazon? Do we think NZ rugby would say "stuff you", close up shop and there would be no more rugby in NZ? Or perhaps could another model be found which incoporates less money, more subscribers and more diverse providers?

I think if you step away from the current assumptions - ie huge rights costs and geographic exclusive broadcast rights - there may be different answers. Not all of which will involve Sky.

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#1854538 29-Aug-2017 08:50

tdgeek:

sonyxperiageek: ^ Yes, but when does Sky's Optus lease agreement end?

I thought it was 2018 or 2019 then someone here said it was 2021

Oct/Nov 2021. Optus D1 in operation Nov 2006 + 15 years. This is the use by date of the satellite I think and in theory D1 will be replaced.

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#1854539 29-Aug-2017 08:55

karni:

tdgeek:

I have never seen that put forward. Its common knowledge that broadcasters bid for rights, and common knowledge that Sky isn't always the top bidder or will pay the asking price.

Bad editing sorry, I meant to quote this directly:

shk292: There is, in my opinion, a false assumption from the supporters of Sky in this debate - and that is that sports rights cost what they cost, and this has to be paid.

I actually think that the costs of sport, especially rugby in NZ, has been fuelled by Sky bidding to win it exclusively, because without it they would die. They know (incorrectly or otherwise) that they have a captive market, including those who pay for Basic and subsidise Sport. So, they can afford to pay huge sums for sports rights and pass these on to the customers.

What if they didn't do this? What if Sky currently pay $100M for NZ Rugby (a number I just made up), then they go out of business next month and the next highest bid for rugby rights is $40M from TVNZ or Amazon? Do we think NZ rugby would say "stuff you", close up shop and there would be no more rugby in NZ? Or perhaps could another model be found which incoporates less money, more subscribers and more diverse providers?

I think if you step away from the current assumptions - ie huge rights costs and geographic exclusive broadcast rights - there may be different answers. Not all of which will involve Sky.

I think his example is quite a stretch. Its a free market. Sky wants the Rugby, Rugby wants the money. If Sky loses another 5% or more this year, Rugby may have to accept that Sky cannot afford the big money, and Rugby gets say 10 million or more less. Rugby can look elsewhere. Sky isnt a cashcow throwing it around. Something will have to give, and Rugby will have to do the giving I feel. Note that Rugby is not the be all and end all of sports, its one of many. Skys costs rose 30 million, that would all be rights. When RWC is on, and other major sports like Olympics, there is no sport subscription increase, Sky wears that. Its not quite the ogre everyone thinks, and if they decided to close shop, those sports will still want their pound of flesh

Apsattv

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#1854543 29-Aug-2017 09:00

The transmission costs in the financial statements included the 7 leases, and HD fees

Link and page please

tdgeek

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#1854559 29-Aug-2017 09:15

Apsattv:

The transmission costs in the financial statements included the 7 leases, and HD fees

Link and page please

https://www.nzx.com/files/attachments/263967.pdf

Extract wont copy well, as below. Maybe HD broadcasting means at Skys end? I took it as more HD delivery, maybe I'm wrong. But they do account for HD costs

Broadcasting and infrastructure costs

consist of transmission and linking costs for transmitting SKY and Prime’s television signals from its

studios in Auckland to other locations in New Zealand and the costs of operating SKY’s television stations at Mt Wellington and Albany. The costs

of leasing seven transponders on the Optus D1 satellite are included, as is the cost of high definition television broadcasting. Broadcasting and

infrastructure costs have increased marginally by 1.7% to $97.6 million due to increased internet delivery costs for on demand content and costs

of supporting SKY’s OTT products (NEON, FAN PASS).

Other costs

PhantomNVD

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#1854565 29-Aug-2017 09:30

So they saying Neon and Fanpass cost them nearly $100 million?
But that that is only just less than 2% of their costs, meaning their (running?) costs are 5 billion 😳

Something seriously not right there!

With 4 million residents, how on earth do they make a profit (and they do) with a (roughly) 5 billion running cost???

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Benoire

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#1854566 29-Aug-2017 09:32

They're saying that their total infrastructure costs are at almost $100m and have increased by 1.7% due to increased internet costs; not that the internet portion is $100m.

tdgeek

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#1854578 29-Aug-2017 09:38

Benoire:

They're saying that their total infrastructure costs are at almost $100m and have increased by 1.7% due to increased internet costs; not that the internet portion is $100m.

Yes. A large amount of that 100 mill you would expect would be lease costs. Maybe its 80, maybe 60 maybe 50.

Apsattv

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#1854591 29-Aug-2017 09:50

"The costs of leasing seven transponders on the Optus D1 satellite are included, as is the cost of high definition television broadcasting. Broadcasting and infrastructure costs have increased marginally by 1.7% to $97.6 million due to increased internet delivery costs for on demand content and costs of supporting SKY’s OTT products (NEON, FAN PASS)."

That's vague and it doesnt say they pay Optus extra for HD SKY broadcasts at all, the only case where they would be paying Optus for extra capacity for HD signals is when they need to use bandwidth on another Optus Satellite for something such as an uplink or downlink for an event. Like the OZ open tennis.. when Sky was running extra channel coverage. They used Optus D2 to feed sky the extra channels..

sonyxperiageek

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#1854675 29-Aug-2017 12:01

tdgeek:

sonyxperiageek: ^ Yes, but when does Sky's Optus lease agreement end?

I thought it was 2018 or 2019 then someone here said it was 2021

2021 is for rugby rights I'm pretty sure.

Sony

bagheera

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#1854920 29-Aug-2017 18:43

personal i feel that sky got it wrong - it not piracy that their biggest reason for lost of customers - it is auckland housing market - people can no long afford $100+ a month when you got a 1,000,0000 mortgage with interest rate slowly rising, or if renting, the landlord increasing rent to cover their 1,000,000 mortgages.

No matter how much you like sport, if you can not pay for power, food, and heating after paying for a roof over your head, then it will be one of the first thing to go - there is a lot on middle class poverty now days - and sky main audience is middle class workers.

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#1854922 29-Aug-2017 18:53

This is a good point that maybe gets overlooked.

Plesse igmore amd axxept applogies in adbance fir anu typos

shk292

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#1854929 29-Aug-2017 19:34

bagheera:

personal i feel that sky got it wrong - it not piracy that their biggest reason for lost of customers - it is auckland housing market - people can no long afford $100+ a month when you got a 1,000,0000 mortgage with interest rate slowly rising, or if renting, the landlord increasing rent to cover their 1,000,000 mortgages.

No matter how much you like sport, if you can not pay for power, food, and heating after paying for a roof over your head, then it will be one of the first thing to go - there is a lot on middle class poverty now days - and sky main audience is middle class workers.

I think it's also a VFM thing. When the choice was analogue SD TV for free or Sky digital for $80 per month, the $80 was OK - especially if you looked at the whole package including what was then the best PVR available.

Now for your Sky subs you can get Freeview digital hd (free), Netflix HD on multi devices ($15?), Lightbox (free or <$20), BBC iplayer if you're reasonably techie, and still have $60 left every month. So, if you don't want live sport, or lots of sport, dropping Sky has become a bit of a no-brainer. I subscribed for about eight years then stopped four years ago, bought a Panasonic PVR, sorted out internet streaming to the TV and haven't looked back. Even TVNZ on demand is quite good now, and Chromecast is cheap and easy.

The extra hassle factors Sky adds like ads, incessant trailers, DRM, limited viewing locations, limited recording storage etc just make the decision easier.

I don't think Sky are rorting, I think they just haven't moved with the times and with the better options available they represent poor VFM except for sports fans.

bagheera

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#1854931 29-Aug-2017 19:51

shk292:

I think it's also a VFM thing. When the choice was analogue SD TV for free or Sky digital for $80 per month, the $80 was OK - especially if you looked at the whole package including what was then the best PVR available.

Now for your Sky subs you can get Freeview digital hd (free), Netflix HD on multi devices ($15?), Lightbox (free or <$20), BBC iplayer if you're reasonably techie, and still have $60 left every month. So, if you don't want live sport, or lots of sport, dropping Sky has become a bit of a no-brainer. I subscribed for about eight years then stopped four years ago, bought a Panasonic PVR, sorted out internet streaming to the TV and haven't looked back. Even TVNZ on demand is quite good now, and Chromecast is cheap and easy.

The extra hassle factors Sky adds like ads, incessant trailers, DRM, limited viewing locations, limited recording storage etc just make the decision easier.

I don't think Sky are rorting, I think they just haven't moved with the times and with the better options available they represent poor VFM except for sports fans.

most differently - one of the reason i said sport was because that is the only reason i can see why you would have sky or live somewhere internet sucks, but that is a low % of people now days

Also think the icing on the cake of FU to my customer enjoyment, we just want the $$$$$$ was the ad between the haka and the start of the rugby match - who in the right mind would think that would go down well, and not beep off all your customers.

tdgeek

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#1855057 30-Aug-2017 07:14

shk292:

bagheera:

personal i feel that sky got it wrong - it not piracy that their biggest reason for lost of customers - it is auckland housing market - people can no long afford $100+ a month when you got a 1,000,0000 mortgage with interest rate slowly rising, or if renting, the landlord increasing rent to cover their 1,000,000 mortgages.

No matter how much you like sport, if you can not pay for power, food, and heating after paying for a roof over your head, then it will be one of the first thing to go - there is a lot on middle class poverty now days - and sky main audience is middle class workers.

I think it's also a VFM thing. When the choice was analogue SD TV for free or Sky digital for $80 per month, the $80 was OK - especially if you looked at the whole package including what was then the best PVR available.

Now for your Sky subs you can get Freeview digital hd (free), Netflix HD on multi devices ($15?), Lightbox (free or <$20), BBC iplayer if you're reasonably techie, and still have $60 left every month. So, if you don't want live sport, or lots of sport, dropping Sky has become a bit of a no-brainer. I subscribed for about eight years then stopped four years ago, bought a Panasonic PVR, sorted out internet streaming to the TV and haven't looked back. Even TVNZ on demand is quite good now, and Chromecast is cheap and easy.

The extra hassle factors Sky adds like ads, incessant trailers, DRM, limited viewing locations, limited recording storage etc just make the decision easier.

I don't think Sky are rorting, I think they just haven't moved with the times and with the better options available they represent poor VFM except for sports fans.

At Basic $20 that becomes a nice option to add to your list.

Your list of bad things is not a big deal for me. Ads are everywhere. Trailers, I dont seem to notice them being incessant. DRM, dont have a need to bypass it, Limited viewing locations. Well TV is stuck in living room, SkyGo is anywhere in NZ as is Sky OnDemand. Storage, mine is only 14% free due to a hoarder

But yes, these things, YMMV

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