Shock! Horror! SkyTV reports a big $240m loss!

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tdgeek

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#2078707 24-Aug-2018 19:11

Buster:

So is the 57,000 subscriber loss across all SkyTV platforms or just satellite?

28,000 subscriber loss reported 2017. There's a trend going on here.

There is, and its obvious why. If you had well north of 800,000 subscribers, its ok.

If you want to talk profit capability, feel free.

RunningMan

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#2078709 24-Aug-2018 19:13

fprfalcon: Just watching the news on this. They reckon 500,000 people watched the rugby last weekend on Smyth. How do they know this?

Probably the same way as last time you asked

tdgeek

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#2078710 24-Aug-2018 19:16

stinger:

MikeB4:

ockel:

"As I write this, SKY has been informed that we were not the highest bidder for the Oscars in 2019."

Thats a positive for Sky

I imagine Sky get a total of zero new customer if they won the rights to the Oscars (which happens in the afternoon in NZ). The ad revenue would also be minimal. Like with the RWX2019, Sky won't be losing any sleep.

RWX? XGames ? :-)

As per this report, Sky didnt have the one off cost of a few events. RWC next year will cost a bomb. It will attract a few 6 month/12 month contracts (plus wasted funds for some dishes/STB's) then they cancel. RWC 2019 is therefore a money maker for Sky

tdgeek

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#2078711 24-Aug-2018 19:18

mattwnz:

Some businesses just have a use by date, as they become less relevant. They are still doing pretty well all things considered. But if they want to grow, IMO they need to totally change.

Evolve, not change. Its a bit like Apple, everyone seems to hate them, but they make more money than everyone else combined. Sky is the same.

tdgeek

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#2078712 24-Aug-2018 19:18

fprfalcon: Just watching the news on this. They reckon 500,000 people watched the rugby last weekend on Smyth. How do they know this?

Who is Smyth?

tdgeek

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#2078714 24-Aug-2018 19:23

fprfalcon: Just watching the news on this. They reckon 500,000 people watched the rugby last weekend on Smyth. How do they know this?

I doubt there are 500,000 rugby fans here

ockel

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#2078721 24-Aug-2018 19:48

fprfalcon: Just watching the news on this. They reckon 500,000 people watched the rugby last weekend on Smyth. How do they know this?

Ad funded television relies on Peoplemeters to collect sample data on viewing habits. Sky can use the decoder base to collect data on viewing habits (and yes when you subscribe you agree to allow Sky to collect this data as part of the terms and conditions). So Sky knows very well who is watching and when they are watching it (and how many watch a program OnDemand, and who buys the PPV movies etc etc).

So probably 185,000 decoders tuned into the rugby last weekend (thats 2.7 people/HH = 500,000 people). And it knows how many concurrent streams watched on SkyGo and FanPass.

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tdgeek

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#2078726 24-Aug-2018 19:54

ockel:

fprfalcon: Just watching the news on this. They reckon 500,000 people watched the rugby last weekend on Smyth. How do they know this?

Ad funded television relies on Peoplemeters to collect sample data on viewing habits. Sky can use the decoder base to collect data on viewing habits (and yes when you subscribe you agree to allow Sky to collect this data as part of the terms and conditions). So Sky knows very well who is watching and when they are watching it (and how many watch a program OnDemand, and who buys the PPV movies etc etc).

So probably 185,000 decoders tuned into the rugby last weekend (thats 2.7 people/HH = 500,000 people). And it knows how many concurrent streams watched on SkyGo and FanPass.

185,000 decoders, while Dad watched and the wife watched The Bachelor and the kids watched Kardashians, both elsewhere! :-)

ockel

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#2078727 24-Aug-2018 19:57

tdgeek:

ockel:

fprfalcon: Just watching the news on this. They reckon 500,000 people watched the rugby last weekend on Smyth. How do they know this?

Ad funded television relies on Peoplemeters to collect sample data on viewing habits. Sky can use the decoder base to collect data on viewing habits (and yes when you subscribe you agree to allow Sky to collect this data as part of the terms and conditions). So Sky knows very well who is watching and when they are watching it (and how many watch a program OnDemand, and who buys the PPV movies etc etc).

So probably 185,000 decoders tuned into the rugby last weekend (thats 2.7 people/HH = 500,000 people). And it knows how many concurrent streams watched on SkyGo and FanPass.

185,000 decoders, while Dad watched and the wife watched The Bachelor and the kids watched Kardashians, both elsewhere! :-)

You're right - it does beg the question. What were the other 475,000 odd households watching if it wasnt the rugby because apparently Sky = rugby.

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JarrodM

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#2078729 24-Aug-2018 20:06

Net profit before impairment was up obviously good sign for sky, but you have to look beyond and ask how. Subscribers down, average revenue per subscriber down (to be expected from new pricing structure, but apparently 91% of subscribers still Sky entertainment ie the old basic, so average revenue per subscriber has the potential to still fall drastically)

So the increase in profit is a result of lower costs - installation costs down which is predictable due to less subscribers, but also content costs are down (previous year included America’s cup and rio Olympics in the costs, so there is part of it). So I wonder how they will word the price increase letter this year... usually due to rising content costs.

You’ve got to wonder how they’ve managed to reduce content costs in the current world of tv and sports rights, cause they’re definitely not getting cheaper... (note I haven’t looked in depth at previous years and what content was included each year etc)
Is it just that they’re buying less content or lower quality? Then you ask why are people canceling, which I’d say is just people not seeing value in it (which is made up of price they’re paying for the content they’re getting, also impacting would be the way of consumption)
They have to stop the churn, if they keep losing 60000 customers a year they’ll be dead simple as that.
To stop the churn they need to create more value for the subscribers, either by price reduction, greater content, or better consumption options.
Obviously they’re working on the consumption options (Internet, apps etc) but it’s slow progress, so if that takes 3-4 years they could lose another 200k of subscribers...

Neon and fanpass are obviously a bit of a dead dog, as if they were doing any good they’d be crowing about the subscriber numbers in more detail.

Those are just my thoughts anyway, feel free to agree or disagree, point out flaws in my logic...

Also saw a slide on their investor presentation called “content war” showing that the premier league only accounted for 0.24% of viewing between August 2017 and May 2018...

ockel

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#2078786 24-Aug-2018 21:05

JarrodM: Net profit before impairment was up obviously good sign for sky, but you have to look beyond and ask how. Subscribers down, average revenue per subscriber down (to be expected from new pricing structure, but apparently 91% of subscribers still Sky entertainment ie the old basic, so average revenue per subscriber has the potential to still fall drastically)

So the increase in profit is a result of lower costs - installation costs down which is predictable due to less subscribers, but also content costs are down (previous year included America’s cup and rio Olympics in the costs, so there is part of it). So I wonder how they will word the price increase letter this year... usually due to rising content costs.

You’ve got to wonder how they’ve managed to reduce content costs in the current world of tv and sports rights, cause they’re definitely not getting cheaper... (note I haven’t looked in depth at previous years and what content was included each year etc)
Is it just that they’re buying less content or lower quality? Then you ask why are people canceling, which I’d say is just people not seeing value in it (which is made up of price they’re paying for the content they’re getting, also impacting would be the way of consumption)
They have to stop the churn, if they keep losing 60000 customers a year they’ll be dead simple as that.
To stop the churn they need to create more value for the subscribers, either by price reduction, greater content, or better consumption options.
Obviously they’re working on the consumption options (Internet, apps etc) but it’s slow progress, so if that takes 3-4 years they could lose another 200k of subscribers...

Neon and fanpass are obviously a bit of a dead dog, as if they were doing any good they’d be crowing about the subscriber numbers in more detail.

Those are just my thoughts anyway, feel free to agree or disagree, point out flaws in my logic...

Also saw a slide on their investor presentation called “content war” showing that the premier league only accounted for 0.24% of viewing between August 2017 and May 2018...

Good summary. Hits the nail on the head. Kinda makes me think of the telco space.

Little or no top line growth, highly competitive environment with constant market share loss and where there is no real value add - to stop churn you've got to add value which means giving away more for less (or free stuff). The only bottom line growth is from taking out costs and that can only go on for so long. Continual need to reinvest in networks for the next round of growth etc etc. Either cut the dividend or borrow to maintain the dividend (and that can only go on for so long). Add new services at the fringe which really dont grow the business but you crow about those dead dogs that no one pays for anyway.

The big question is what would you pay for the respective businesses? Is it 5x free cashflow, 6x, 8x ?? And why would you pay more for one than the other?

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mattwnz

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#2078868 25-Aug-2018 00:23

tdgeek:

mattwnz:

Some businesses just have a use by date, as they become less relevant. They are still doing pretty well all things considered. But if they want to grow, IMO they need to totally change.

Evolve, not change. Its a bit like Apple, everyone seems to hate them, but they make more money than everyone else combined. Sky is the same.

I always see evolving as a natural progression,that is planned for and takes time. I am guessing they are doing that with Neon and other services, but it doesn't seem to be working, looking at it from the outside. Apple was forced to change when Jobs came back, and he turned it around, otherwise they would have likely become irrelevant by now. Hard decisions need to be made when change takes place.

burtz

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#2078897 25-Aug-2018 08:22

Can't believe they still have 750k customers after all the friends and family I have set up Netflix for and then they have dumped Sky.

Do they count hotel and motel rooms as individual subscribers?

tdgeek

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#2078908 25-Aug-2018 10:04

mattwnz:

tdgeek:

mattwnz:

Some businesses just have a use by date, as they become less relevant. They are still doing pretty well all things considered. But if they want to grow, IMO they need to totally change.

Evolve, not change. Its a bit like Apple, everyone seems to hate them, but they make more money than everyone else combined. Sky is the same.

I always see evolving as a natural progression,that is planned for and takes time. I am guessing they are doing that with Neon and other services, but it doesn't seem to be working, looking at it from the outside. Apple was forced to change when Jobs came back, and he turned it around, otherwise they would have likely become irrelevant by now. Hard decisions need to be made when change takes place.

The simple fact is they have competitors. They wont go back to 50% market share, they will lose subscribers until there is equilibrium. The subscriber drop will slow at some point, to what is in this competitive environment, their normal market share. That may be 500,000 subscribers. They can reduce costs forever, they cant drop popular sport content to save costs, they can add value such as a full app to make it more useful and flexible. They will remain as a premium service, at a premium price. It all seems normal to me. New competition means a different playing field as the subscriber $ are effectively the same, just more spread out. Telecom had 100% market share, now its about half that, same situation.

Dunnersfella

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#2078914 25-Aug-2018 10:39

burtz:

Can't believe they still have 750k customers after all the friends and family I have set up Netflix for and then they have dumped Sky.

Do they count hotel and motel rooms as individual subscribers?

20 percent of the hotels I stay in now have Netflix and terrestrial Freeview over Sky...

I still prefer a full 50+ channels on a MySKy box though, I wouldn't pay for it anymore, but for some reason it's preferable for me.

At home I use Netflix US, Hulu+ (no ads) and Amazon + Satellite Freeview.

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