Big drop in Sky subscribers

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Awrrr
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#1557276 22-May-2016 13:44

richms:

From a user perspective the similarities are there, as a user I do not give a crap about the problems the business has moving from old model to new model. They either do it or go broke, both of which I am indifferent to.

Blue bubble could disappear tomorrow, the drivers would go elsewhere and I would still get a lift from uber or someone else.

Sky could disappear and someone else would begin buying/creating and selling video content to people.

I think this states it very well. The point is not about business economics or who gets what. The point is about how the end customer who actually pays for it receives the service she wants for the price she is prepared to pay. Everything else is just hot air.

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tdgeek

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#1557283 22-May-2016 13:47

PhantomNVD: So whatever happened to 'user pays'?

It's the same argument as the bundling 'basic' sky deal.

Charge according to what people want, and if only 150 people want the channel, split it between those 150 rather than cabana losing popular channels 50,000-100,000 people who would pay far less if that channel cost was shared by its user base.

If only 100,000 people 'need/prefer' satellite delivery, and 700,000 would happily stream, why should the whole cost of Sattelite be shared by the whole client base?

If satellite is no longer feasible with only 100,000 paying its costs, business sense says ax the non profitable service?

Thats the proper option, out with the old, in with the new, I agree 100%. Trouble is the world will end when rural users who use Skys $18 FTA access. The farmers that we have to support, etc. I hear the satellite contract is up for renewal 2019, I have no idea of the subscription structure Sky pays for it, but 2019 may be the time that all ofnthis gets brought to the 2019 technologies and pricing. Sky will have to assume the extra costs of not changing now, and of the change to CDN's itself. But thats a normal business issue as any business has when it needs to upgrade. Like I said in the boxing post, they just let 800000 non Sky subscribers not have an option to pay Lonergan and Sky $49-95. Whats up with that?

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#1557284 22-May-2016 13:47

PhantomNVD: So whatever happened to 'user pays'?

It's the same argument as the bundling 'basic' sky deal.

Charge according to what people want, and if only 150 people want the channel, split it between those 150 rather than cabana losing popular channels 50,000-100,000 people who would pay far less if that channel cost was shared by its user base.

If only 100,000 people 'need/prefer' satellite delivery, and 700,000 would happily stream, why should the whole cost of Sattelite be shared by the whole client base?

If satellite is no longer feasible with only 100,000 paying its costs, business sense says ax the non profitable service?

There are many reasons why a business won't handle their business as you suggest:

They'd upset a lot of existing and probably still profitable customers who depend on satellite.
They'd quite probably have a short to medium-term decline in revenue and profitability.
Satellite customers are prepared to pay more. Why would Sky want to convert them into streaming customers who expect a lower price?
etc.

tdgeek

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#1557285 22-May-2016 13:51

Rikkitic:

richms:

From a user perspective the similarities are there, as a user I do not give a crap about the problems the business has moving from old model to new model. They either do it or go broke, both of which I am indifferent to.

Blue bubble could disappear tomorrow, the drivers would go elsewhere and I would still get a lift from uber or someone else.

Sky could disappear and someone else would begin buying/creating and selling video content to people.

I think this states it very well. The point is not about business economics or who gets what. The point is about how the end customer who actually pays for it receives the service she wants for the price she is prepared to pay. Everything else is just hot air.

So running a business has nothing to do with Business economics or what entities receive for the services they provide. Its only about the customers getting what they want, and at the price that suits them. Yeah ok.

richms

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#1557286 22-May-2016 13:54

By 2019, UFB will in theory be "complete" - people that cannot get it are choosing a lifestyle where they live in an area that is not serviced by it and should pay the consequences of that choice if the sky satellite product becomes inferior or disappears.

I dont think they will just flip a switch and turn off the sat, but with mpeg4, and a smaller channel range they could reduce the capacity they buy, put less channels on it and make many of them only available over fiber based providers.

I seem to recall they bought as much as they did inorder to lock TVNZ out of getting more space on the old optus sat and possibly competing with them. That lead to the current problem with only 2 transponders for the mpeg2 based freeview product.

Richard rich.ms

Benoire

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#1557287 22-May-2016 13:55

PhantomNVD: So whatever happened to 'user pays'?

It's the same argument as the bundling 'basic' sky deal.

Charge according to what people want, and if only 150 people want the channel, split it between those 150 rather than canabalising popular channels 50,000-100,000 people who would pay far less if that channel cost was shared by its user base.

If only 100,000 people 'need/prefer' satellite delivery, and 700,000 would happily stream, why should the whole cost of Sattelite be shared by the whole client base?

If satellite is no longer feasible with only 100,000 paying its costs, business sense says ax the non profitable service?

They can't until their contract with Optus expires in 2019, only then can they consider NOT using the satellite service; at the moment their contract with Optus forces them to be a satellite only provider as the population in New Zealand is not large enough to run both side by side, unless of course they charge the same price for the online distribution.

EDIT: re comment above, they have a capacity bought in 2003/4 before SVOD came about that fixes them to the transponders they run. They can use them more efficiently, DVB-s/2, H.265 etc. but they're still carry 20 or so transponders at a substantial cost until 2019... There might be conditions for terminating the contract early, who knows...

My earlier question still stands... Is the internet in New Zealand sufficiently mature enough to deal with 800,000.00 additional streaming clients in HD? Chorus only guarantee a bandwidth of less than 200KB/s per connection don't they, so if the internet is saturated will everyone be able to get a decent stream even after UFB?

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tdgeek

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#1557299 22-May-2016 14:01

Hammerer:

PhantomNVD: So whatever happened to 'user pays'?

It's the same argument as the bundling 'basic' sky deal.

Charge according to what people want, and if only 150 people want the channel, split it between those 150 rather than cabana losing popular channels 50,000-100,000 people who would pay far less if that channel cost was shared by its user base.

If only 100,000 people 'need/prefer' satellite delivery, and 700,000 would happily stream, why should the whole cost of Sattelite be shared by the whole client base?

If satellite is no longer feasible with only 100,000 paying its costs, business sense says ax the non profitable service?

There are many reasons why a business won't handle their business as you suggest:

They'd upset a lot of existing and probably still profitable customers who depend on satellite. very much so
They'd quite probably have a short to medium-term decline in revenue and profitability. I feel thats inevitable, as they will be expending time and money setting up the streaming service. They already have it, but in small doses, plus the costs pf what would probably be losses on low numbers of satellite customers, albeit depending how the pricing Sky pays is managed.
Satellite customers are prepared to pay more. Why would Sky want to convert them into streaming customers who expect a lower price?
I don't get how satellite subscribers are prepared to pay more. They can afford the price though, thats not the same. If some want to dig in with their MySky and watch via satellite, they pay for it, maybe more. Or they can still use the MySky and watch the same stuff which now comes via the internet not via the dish. Cheaper, we all want that. Or save more money and subscribe to Sky, and no STB please ill use my own via the app. As Ockel implied, there may be a large decrease in satellite costs when the renewal, if its made, is negotiated. The satellite provider wont want to lose that, they also will have to bear the costs of upgrades. Maybe the Sat and VOD may be cost similar? So customers save money, Sky pertains profit pre user more or less, and the Sat provider loses.

tdgeek

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#1557301 22-May-2016 14:06

richms:

By 2019, UFB will in theory be "complete" - people that cannot get it are choosing a lifestyle where they live in an area that is not serviced by it and should pay the consequences of that choice if the sky satellite product becomes inferior or disappears.

I dont think they will just flip a switch and turn off the sat, but with mpeg4, and a smaller channel range they could reduce the capacity they buy, put less channels on it and make many of them only available over fiber based providers.

I seem to recall they bought as much as they did inorder to lock TVNZ out of getting more space on the old optus sat and possibly competing with them. That lead to the current problem with only 2 transponders for the mpeg2 based freeview product.

Good point, oddly an alignment of the planets. Consider that Sky's day of reckoning, to start migrating away, or stay on, or both. Thats the day something has to change, whether that be Skys current offerings staying the same or shrinking to just a revitalised VOD only Sport and Basic/Neon. No doubt if its 2019 renewal, the negotiations will be well before that.

tdgeek

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#1557304 22-May-2016 14:10

Benoire:

PhantomNVD: So whatever happened to 'user pays'?

It's the same argument as the bundling 'basic' sky deal.

Charge according to what people want, and if only 150 people want the channel, split it between those 150 rather than canabalising popular channels 50,000-100,000 people who would pay far less if that channel cost was shared by its user base.

If only 100,000 people 'need/prefer' satellite delivery, and 700,000 would happily stream, why should the whole cost of Sattelite be shared by the whole client base?

If satellite is no longer feasible with only 100,000 paying its costs, business sense says ax the non profitable service?

They can't until their contract with Optus expires in 2019, only then can they consider NOT using the satellite service; at the moment their contract with Optus forces them to be a satellite only provider as the population in New Zealand is not large enough to run both side by side, unless of course they charge the same price for the online distribution.

EDIT: re comment above, they have a capacity bought in 2003/4 before SVOD came about that fixes them to the transponders they run. They can use them more efficiently, DVB-s/2, H.265 etc. but they're still carry 20 or so transponders at a substantial cost until 2019... There might be conditions for terminating the contract early, who knows...

My earlier question still stands... Is the internet in New Zealand sufficiently mature enough to deal with 800,000.00 additional streaming clients in HD? Chorus only guarantee a bandwidth of less than 200KB/s per connection don't they, so if the internet is saturated will everyone be able to get a decent stream even after UFB?

Doesnt Netflix have CDN arrangements with most RSP's? So its not so much over the internet, but more localised. Like a larger version of the "last mile"?

Longer buffer times could help? Options to download and play later? Just ideas.

Benoire

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#1557307 22-May-2016 14:15

tdgeek:

Doesnt Netflix have CDN arrangements with most RSP's? So its not so much over the internet, but more localised. Like a larger version of the "last mile"?

Longer buffer times could help? Options to download and play later? Just ideas.

I don't think that matters in terms of CDN as it is the links for each customer domestically, let alone international. At 200KB/s (or whatever) will never get decent HD streaming if the network is saturated and buffering won't help unless buffering = download entire show.. this is of course reliant on information I've read elsewhere a while on geekzone so if someone knows what the CIR is as I believe we're on that as a bare network minimum...

Rikkitic

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#1557310 22-May-2016 14:27

tdgeek:

Rikkitic:

richms:

From a user perspective the similarities are there, as a user I do not give a crap about the problems the business has moving from old model to new model. They either do it or go broke, both of which I am indifferent to.

Blue bubble could disappear tomorrow, the drivers would go elsewhere and I would still get a lift from uber or someone else.

Sky could disappear and someone else would begin buying/creating and selling video content to people.

I think this states it very well. The point is not about business economics or who gets what. The point is about how the end customer who actually pays for it receives the service she wants for the price she is prepared to pay. Everything else is just hot air.

So running a business has nothing to do with Business economics or what entities receive for the services they provide. Its only about the customers getting what they want, and at the price that suits them. Yeah ok.

Absolutely. The bottom line fundamental of every business outside North Korea is that it has to supply something customers want at a price they are prepared to pay. If it doesn't get those two simple things right, it will fail. If it can't figure out how to do this, someone else will come along who can.

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tripper1000

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#1557314 22-May-2016 14:41

The pricing and methodology of delivering video to peoples homes has changed.

In the old days every company used V/UHF and the playing field was fairly even.

Then sky switched to a new-ish medium - satellite, which was more economical given N.Z.'s geography and population dispersion.

Now a newer medium, "UFB", has come along which has an even wider geographical reach than satellite (one corner of the globe to another) and where the consumer is already happily paying most of the cost of delivery.

Just as Sky crushed it's competition utilising new technology, new competition using new technology is taking bigger and bigger bites out of Sky's pie.

Sky has to use UFB or be left behind just like it has left it's previous competitors behind.

Rikkitic

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#1557326 22-May-2016 15:05

Since I am in a marginal area and depend on RBI, the question of what happens to those who cannot get either fibre or RBI is an interesting one. I believe landline phones that are not economical have been subsidised up to now. I imagine something similar might happen in a Skyless future. Maybe the reduced number of people who cannot get other options could hitchhike on satellites with other primary uses. Maybe with improved RF technology the government could put up relays on all the mountaintops. Maybe that nice, philanthropic Google will fly some Internet balloons over our inaccessible areas. Maybe those who live remotely will just have to do without, and maybe they won't miss it at all. I think it is a mistake to imagine that if Sky goes bust, it will all come crashing down or become unpayable. If there is one thing we all should have learned by now, it is that things don't stand still.

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richms

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#1557332 22-May-2016 15:29

It's just entertainment. If sky goes away or is significantly reduced in content via satellite then it might make the push for more rural ufb.

Richard rich.ms

tdgeek

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#1557338 22-May-2016 15:38

richms: It's just entertainment. If sky goes away or is significantly reduced in content via satellite then it might make the push for more rural ufb.

Exactly.

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