Big drop in Sky subscribers

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#1554696 18-May-2016 11:12

Benoire:

But don't you pay vodafone for the privilege and not Sky? Vodafone is setup for this as it runs a large amount of the infrastructure doesn't it? Sky is not an internet company so would have to lease bandwidth to serve the content?

Or partner with other ISPs as well to deliver the content and get out of the distribution game altogether.

Richard rich.ms

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#1554703 18-May-2016 11:18

So I presume NET profit is prior to tax in NZ? In which case,there is still the tax to be paid on it, so that might reduce the figure by what ever the corporate tax rate is here. Realistically when content is costing in the millions of dollars these days, it doesn't take much to see that they're making OK money but not that much and that increasing the cost by inflation (or there about) is not unheard of. I suspect that there profits for 2016 will be lower due to SVOD and the increased cost of purchasing sports/show case tv programs too.

I would be interested to know the subscriber demographics for Sky NZ as that may give an insight in to who might move away from the service as SVOD takes hold.

Benoire

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#1554707 18-May-2016 11:21

richms:

Benoire:

But don't you pay vodafone for the privilege and not Sky? Vodafone is setup for this as it runs a large amount of the infrastructure doesn't it? Sky is not an internet company so would have to lease bandwidth to serve the content?

Or partner with other ISPs as well to deliver the content and get out of the distribution game altogether.

I would imagine that Vodafone offer this for free to incentivise people to come to Vodafone, if other ISPs offered Sky over UFB (this obviously is reliant on UFB too which lots of households don't yet have) then vodafone do not have an advantage and might consider charging Sky for the privalage.

In the UK, Sky are an ISP have been for years so have the infrastructure in place to allow SVOD (plus a population of $70m to get money from). In NZ, Sky would find it difficult to become a major ISP with their own gear to make it effective. All speculation, but isn't that part of the fun?

MikeB4

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#1554710 18-May-2016 11:23

darylblake:

MikeB4:

Sky is still making money, their total assets are circa $1.9 Billion and for Fiscal 2015 they returned a Net profit of $170 million.

Obviously not enough to stop them from increasing the price of the service.

Companies increase prices all the time to take into account the cost of sales. In order to plan and develop Sky needs to be able to project their earnings years in advance so profits stay at a required level. They also need to provide the level of ROI required by the owners.

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

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#1554751 18-May-2016 12:19

MikeB4:

Companies increase prices all the time to take into account the cost of sales.

Not necessarily so. Some companies decrease pricing in order to maintain market share in times of intense competition, then find cost savings in cost of sales to compensate.

The problem for Sky is that their pricing is looking increasingly steep compared against the new kid on the block, SVOD.

But, then, pricing is just one of their problems. An increasingly outdated consumer service model is another.

And no doubt the competition vultures are circling around future sports rights. Dark clouds.

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#1554777 18-May-2016 13:20

Great service from sky last night.

Got home after a couple of days away. MySKy HDI was buggy - displaying an atmospheric interference message and guide was unresponsive. Other satellite decoders in the house were working fine and the coax lead from the wall socket to the sky decoder appeared to be in order. Fault might have been related to an impressive electrical storm the previous evening.

I called the sky 0800. After a few key presses I was connected to a person speaking kiwi English inside 30 seconds. No "what is your account number/name whatever" BS.

I described the symptoms and was talked through a device reset (reset button under the flap covering the card slot). The CSO stayed on the line for the three or four minutes it took to comer back to life. Problem solved. No waiting, now tedious working through a script.

Hard to beat that service level.

Mike

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Rikkitic

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#1554806 18-May-2016 13:50

Maybe the improvement in service is part of a larger effort to be more responsive to customers. If so, this is a good thing. Whether Sky's past behaviour was rapacious or not, it will have to adapt to changing circumstances and new customer demands if it wants to stay in business. If it does make these changes, everyone will benefit and there will no longer be any reason to complain about it. Welcome to the new Sky.

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#1554815 18-May-2016 13:57

Rikkitic:

Maybe the improvement in service is part of a larger effort to be more responsive to customers. If so, this is a good thing. Whether Sky's past behaviour was rapacious or not, it will have to adapt to changing circumstances and new customer demands if it wants to stay in business. If it does make these changes, everyone will benefit and there will no longer be any reason to complain about it. Welcome to the new Sky.

I think that Skys customer service has always been pretty good. It being reliable certainly helps that. If we dont hear any news of the new things they will bring to the party, it might get too late. I imagine churn would act like a snowball down a hill after a while

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#1554883 18-May-2016 15:20

Benoire:
richms:
Benoire: But don't you pay vodafone for the privilege and not Sky? Vodafone is setup for this as it runs a large amount of the infrastructure doesn't it? Sky is not an internet company so would have to lease bandwidth to serve the content?

Or partner with other ISPs as well to deliver the content and get out of the distribution game altogether.

I would imagine that Vodafone offer this for free to incentivise people to come to Vodafone, if other ISPs offered Sky over UFB (this obviously is reliant on UFB too which lots of households don't yet have) then vodafone do not have an advantage and might consider charging Sky for the privalage.

In the UK, Sky are an ISP have been for years so have the infrastructure in place to allow SVOD (plus a population of $70m to get money from). In NZ, Sky would find it difficult to become a major ISP with their own gear to make it effective. All speculation, but isn't that part of the fun?

The main reason why Vodafone can offer Sky via UFB is that Vodafone have their non-trivial sized TV platform they use for the Cable network in WLG and CHC. I'm fairly sure they use the same platform to stream Sky over UFB using similar model TBoxes. As they use part of the bandwidth to stream common channels using multicast so they only need to stream it once over the fibre on a separate vlan as a multicast over fibre. The for the non-common streams that's a point to point rather than multicast.

No other ISPs in NZ have a TV platform as they aren't in the TV game. So really Vodafone is dependent on Sky for their whole Cable system. Since without TV their triple play offering really isn't much of an offering and the cost to shutdown the cable network is non-trivial as Vodafone would have to remove the cables from the polls which would be a multi-million dollar exercise. If Vodafone have to have a TV platform for their cable network they might as well offer it up anywhere they can sell it.

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#1554938 18-May-2016 15:57

Benoire:

So I presume NET profit is prior to tax in NZ?

Net = after tax. Gross = before tax. You also see EBITDA depending on where you read. Thats: Earnings Before Interest, Taxes Depreciation and Amortisation.

eracode

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#1555222 18-May-2016 21:52

nzkc:

Benoire:

So I presume NET profit is prior to tax in NZ?

Net = after tax. Gross = before tax. You also see EBITDA depending on where you read. Thats: Earnings Before Interest, Taxes Depreciation and Amortisation.

Not really - a simple P&L or Income Statement is:

Sales
Less: Cost of Goods Sold
= Gross Profit
Less: Expenses excl. Interest
= Earnings Before Interest and Tax (EBIT)
Less: Interest
= Net Profit Before Tax
Less: Tax
= Net Profit After Tax

You can also separate-out Depreciation and Amortisation if you want EBITDA

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DarthKermit

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#1555905 20-May-2016 07:28

Question to those who have dumped Sky: Have you had them phoning you a few months later begging you to rejoin?

tdgeek

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#1555907 20-May-2016 07:31

DarthKermit:

Question to those who have dumped Sky: Have you had them phoning you a few months later begging you to rejoin?

Nope, I cancelled mid Feb

richms

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#1555913 20-May-2016 07:48

I get calls from them all the time. They must try heaps because I only turn off anon call blocking when I am expecing a blocked call, and soon afterwards they are calling.

Richard rich.ms

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#1555938 20-May-2016 08:50

DarthKermit:

Question to those who have dumped Sky: Have you had them phoning you a few months later begging you to rejoin?

years after cancelling, despite me telling them no to call I still get the occasional call.

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