SkyTV, TV One and TV3 Ban Slingshot Adverts

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Reply # 1102433 5-Aug-2014 10:56

shk292:
NonprayingMantis:
it would be based on the size of the market, not subscriber numbers. Otherwise one could startup your own streaming business and get all content for virtually nothing by way of having no subscribers.

There is a very good reason that the rights holders have these separate region deals - it makes them more money. Anybody undermining the regional deals means they make less money. If you think they make more money by letting Netflix sell globally you are just plain wrong. If they did, they wouldn't even be placing the geoblocking restriction on Netflix in the first place!

Up until now, the numbers using Netflix outside the regions have been so small as to not be worth chasing.
But with major ISPs promoting it (slingshot is third largest in NZ), you can bet your bottom dollar that they will start coming down on them.

And if they let slingshot get away with it in NZ, how long before iiNet do it in the states, or even other countries?
I'm pretty sure Sky UK, owned by the giant Newscorp, would be pretty miffed if other ISPs in the UK started promoting access to the vastly superior US netflix instead of the pretty average UK netflix, and taking $$$ away from Sky UK who has to pay big bucks to the studios for the exclusive content rights to stop UK Netflix having it.

I would be very surprised if global mode lasts more than 6 months now it is being promoted heavily above the line.

Can't you see how you're contradicting yourself? You say licensing costs are based on market size, not subscriber numbers, then you say that the rights holders lose money if consumers circumvent the regional restrictions? Only one of these statements can be true!

OK, explain to me, if Sky NZ pay X dollars for a market size of A, and Netflix US pays Y dollars for a market size of B, what difference does it make to the rights holder if one, 100 or 1000 customers switch from Sky to Netflix?

This is purely SkyNZ protecting their cosy little monopoly. Well, news-flash Sky, the internet doesn't respect cosy geograpical monopolies. You might need to become competitive

To illustrate what I mean, imagine if it were the other way around, and Netflix was an NZ company, paying for rights based on the size of the NZ market (i.e. just a few million dollars) but were able to sell to the US market freely.
The US companies would be pretty aggreived. They are paying billions for US rights, whereas NetflixNZ is only paying millions, yet is still able to sell with impunity within the US because they are happy to breach their contract with the rights holders.

With the current situation, Sky is paying $$ for NZ rights. Netflix is not paying anything for NZ rights. If Netflix is knowingly selling in NZ without paying for the rights (because Slingshot has enabled it), then I can see how that harms Sky and why Sky would be aggrieved.

I'm not saying it's 'right' or 'wrong' but I can see why Sky are annoyed about it - they have paid big bucks for the rights, and for someone else to come in over the top means they have basically wasted their money.

freitasm

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Reply # 1102436 5-Aug-2014 10:59

Well, the same applies to books (local distribution vs personal buying) or drinks (Coca Cola vs Mexican Coca Cola available in some dairies, Coca Cola vs Cherry Coke available in supermarkets)...

Should parallel imports be banned? Should TTPA be approved based on corporate interests?

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skewt

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Reply # 1102437 5-Aug-2014 11:01

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My Netflix/Hulu better not get blocked because slingshot keep advertising the bypass publicly....

This backlash has made sky look bad and since they have contacts in the industry, I imagine they will be following this all up behind the scenes

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Reply # 1102438 5-Aug-2014 11:02

NonprayingMantis:
I'm not saying it's 'right' or 'wrong' but I can see why Sky are annoyed about it - they have paid big bucks for the rights, and for someone else to come in over the top means they have basically wasted their money.

Getting annoyed isn't the right solution to the problem. Adjusting your business model is.

Kiwis have discovered that they are getting ripped of by local TV providers, both in terms of cost and available content. What Sky (and other local providers) need to do is offer ways for Kiwis to view the content they want, in the manner they want to do it, and at a price that is considered good value for money.

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Reply # 1102440 5-Aug-2014 11:04

freitasm: Well, the same applies to books (local distribution vs personal buying) or drinks (Coca Cola vs Mexican Coca Cola available in some dairies, Coca Cola vs Cherry Coke available in supermarkets)...

Should parallel imports be banned? Should TTPA be approved based on corporate interests?

Indeed.

Last year, I purchased a turntable from Amazon. The model I wanted was selling here with a RRP of $750, and the cheapest price by a local retailer was $699. Including shipping charges of $150, it cost me $450 all up to import it from the US. I got lucky and avoided the GST & duty surcharge, but even if it was applied I was saving money.

Should this have been illegal too?

Duffuss

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Reply # 1102448 5-Aug-2014 11:15

vexxxboy: i have Sky only for the sports, and i dont watch Rugby but it's the only place where i can watch ESPN and it's on that channel mainly all the time. i have Netflix for movies because $10 a month is cheaper than $20 on Sky. I have tried streaming sport but it cant beat the HD experience that sky has, in fact i wont watch sport unless it is in full HD .

Totally in agreement/same boat!!!

NonprayingMantis

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Reply # 1102464 5-Aug-2014 11:22

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freitasm: Well, the same applies to books (local distribution vs personal buying) or drinks (Coca Cola vs Mexican Coca Cola available in some dairies, Coca Cola vs Cherry Coke available in supermarkets)...

Should parallel imports be banned? Should TTPA be approved based on corporate interests?

Same thing applies.
If countdown NZ has paid huge dollars for the exclusive territory rights, and then, say, Walmart starts knowingly sending large volumes of Coke to NZ at 1/10th the price, then Countodwn would probably complain to the people who granted them those 'exclusive rights', saying they need to enforce the contracts they have with other distributers that restricts them from selling to NZ.

Whether it is wrong or right is a different question. And I'm not saying it should be illegal either.

All I am saying is that Sky will be complaining to the studios who granted them the rights, and the studios, now they see this is starting to spiral out of control, will likely squash it for forcing Netflix to abide by their own contracts, which requires them to not sell outside their territories.
When it's small numbers (a few thousand) it isn't worth doing much. But when a major ISP starts trumpeting about it, they are going to move fast.

freitasm

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Reply # 1102468 5-Aug-2014 11:24

Here is the thing: individual sales and commercial operations.

If I am buying a book and receiving here then it's individual. If a local company is buying books in bulk and selling here then it's commercial. One is allowed, the other is not.

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Reply # 1102470 5-Aug-2014 11:26

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one of the best TV services I have had is the original Saturn TV it was great, it was very disappointing when they swapped to being just a Sky reseller

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NonprayingMantis

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Reply # 1102475 5-Aug-2014 11:31

freitasm: Here is the thing: individual sales and commercial operations.

If I am buying a book and receiving here then it's individual. If a local company is buying books in bulk and selling here then it's commercial. One is allowed, the other is not.

What is also interesting is that Netflix is essentially selling in NZ and yet does not have to abide by any NZ law and does not pay any NZ tax.
Censorship, for example, in NZ is different to the USA. The consumer goods act does not apply. Neither does the fair trading act.

Yet with Slingshot, the CGA etc does apply - so I wonder how they will cope when/if somebody complains about seeing violent content/sex/swearing on Netflix, or if Netflix decides to one day purge NZ users from it's system. Will Slingshot be liable in any way? they specifically promote the use of Netflix. If people have signed up to 12 month contracts on the basis of these offers, and find 2 months in they can't access the service Slingshot promised them, will Slingshot be in breach of the FTA/CGA?

When you import something using Amazon/eBay etc - you know you are dealing with a US company. When you use global mode, you are dealing with an NZ company (Slingshot) too - and everything that comes with it.

shk292

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Reply # 1102478 5-Aug-2014 11:32

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To illustrate what I mean, imagine if it were the other way around, and Netflix was an NZ company, paying for rights based on the size of the NZ market (i.e. just a few million dollars) but were able to sell to the US market freely.
The US companies would be pretty aggreived. They are paying billions for US rights, whereas NetflixNZ is only paying millions, yet is still able to sell with impunity within the US because they are happy to breach their contract with the rights holders.

With the current situation, Sky is paying $$ for NZ rights. Netflix is not paying anything for NZ rights. If Netflix is knowingly selling in NZ without paying for the rights (because Slingshot has enabled it), then I can see how that harms Sky and why Sky would be aggrieved.

I'm not saying it's 'right' or 'wrong' but I can see why Sky are annoyed about it - they have paid big bucks for the rights, and for someone else to come in over the top means they have basically wasted their money.

Nobody said Sky wasn't losing out, but you said that the rights holder was losing out. And your illustration above doesn't show this. And, as pointed out above in another post, if a SVOD provider vastly increased his market share by recruiting large numbers of overseas subscribers, then I'm sure the rights holders would negotiate a better rate when renewing the deal. So nobody loses out. Except Sky, and we don't care about them

dclegg

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Reply # 1102481 5-Aug-2014 11:34

freitasm: Here is the thing: individual sales and commercial operations.

If I am buying a book and receiving here then it's individual. If a local company is buying books in bulk and selling here then it's commercial. One is allowed, the other is not.

Yeah, but I see what Nonprayingmantis is driving at.

NetFlix/Hulu etc allowing the odd out of region customer access isn't a big deal. But if these numbers get too big, it does become a problem for Sky.

But the solution isn't to crack down on this method of consuming content. Its to analyse what it is about your offering that is causing your customers to look elsewhere, and addressing those issues. This is something that currently Sky is not doing very well, but it is something that will increasingly become an issue for them as more Kiwis discover far better alternatives.

We love our current NetFlix/Hulu setup, but its always in the back of my mind that this is a bit of a house of cards. And the recent outage highlighted that. Whenever we do have issues, we have no official recourse for support from the SVOD provider. This is why Telecom may well be onto a winner if they can nail this Lightbox service. My experience with it so far shows that they're definitely on the right track. There is work to do there, but its looking pretty promising so far.

freitasm

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Reply # 1102482 5-Aug-2014 11:35

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NonprayingMantis:
freitasm: Here is the thing: individual sales and commercial operations.

If I am buying a book and receiving here then it's individual. If a local company is buying books in bulk and selling here then it's commercial. One is allowed, the other is not.

What is also interesting is that Netflix is essentially selling in NZ and yet does not have to abide by any NZ law and does not pay any NZ tax.
Censorship, for example, in NZ is different to the USA. The consumer goods act does not apply. Neither does the fair trading act.

No different than buying a DVD from Amazon. Also censorship doesn't apply to personal items, only on commercial items imported for sale by a local company.

The Slingshot binding to the CGA doesn't relate to using Netflix which is still a personal thing. Slingsht is not selling Netflix services.

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Reply # 1102483 5-Aug-2014 11:35

dclegg:
freitasm: Well, the same applies to books (local distribution vs personal buying) or drinks (Coca Cola vs Mexican Coca Cola available in some dairies, Coca Cola vs Cherry Coke available in supermarkets)...

Should parallel imports be banned? Should TTPA be approved based on corporate interests?

Indeed.

Last year, I purchased a turntable from Amazon. The model I wanted was selling here with a RRP of $750, and the cheapest price by a local retailer was $699. Including shipping charges of $150, it cost me $450 all up to import it from the US. I got lucky and avoided the GST & duty surcharge, but even if it was applied I was saving money.

Should this have been illegal too?

Only from the point of view that because the cost of the import was over $NZ400 you should have paid GST. Could be considered tax avoidance?

In Mauricio's examples above I believe they are only applicable if;
you are importing as a business rather than for personal use (books),
If you purport to be an official source here for that product (Mexican vs local),
You try to pass your product off as another (Coke vs Cherry Coke).
I don't believe parallel imports should be banned, but it has to be made clear that, for personal purchases, there is no protection from the CGA. The same applies to internet services from outside the jurisdiction of the CGA. If Hulu or Netflix rip you off, who you gonna call?

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ajobbins

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Reply # 1102487 5-Aug-2014 11:37

NonprayingMantis:
To illustrate what I mean, imagine if it were the other way around, and Netflix was an NZ company, paying for rights based on the size of the NZ market (i.e. just a few million dollars) but were able to sell to the US market freely.
The US companies would be pretty aggreived. They are paying billions for US rights, whereas NetflixNZ is only paying millions, yet is still able to sell with impunity within the US because they are happy to breach their contract with the rights holders.

With the current situation, Sky is paying $$ for NZ rights. Netflix is not paying anything for NZ rights. If Netflix is knowingly selling in NZ without paying for the rights (because Slingshot has enabled it), then I can see how that harms Sky and why Sky would be aggrieved.

I'm not saying it's 'right' or 'wrong' but I can see why Sky are annoyed about it - they have paid big bucks for the rights, and for someone else to come in over the top means they have basically wasted their money.

You've just re-illustrated the point shk292 and myself were making. This only hurts the distributors (eg. Sky, or in your scenario Netflix - not the rights holders). HBO is an example of a rights holder, Sky is not. Sky is a licence holder paying HBO for the right to distribute.

HBO care only about the total market. If there is 1m subs in NZ and 100m in the US, there total market is 101m. If it turns out that 50m of those customers go via Sky because it's cheaper, and the other 51m use Netflix because it's local, easier - HBO still get paid 101m customers. In your scenario Sky makes a killing, Netflix loses out big time but there is no difference at all for the rights holder.

Sky don't have a right to get grumpy because the business model and market in which they operate doesn't work anymore.

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