Big drop in Sky subscribers

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#1557759 23-May-2016 09:51

dafman:

tdgeek:

MikeB4: I believe what is very evident in the whole anti Sky thing is ..."I want it, I want it now and I don't want to pay for it" mentality.

It is clear looking at Sky's financial returns that they are not making excessive margins on their products. Their overheads and costs are huge. Take for example the cost of outside live coverage of sport, it is hugely expensive and something TVNZ was happy to get out of.

yep, its the tall poppy syndrome, something to complain about. I find it fascinating, to watch what will play out in the move to SVOD, in full or in part.

Geez, here I was thinking I was complaining about Sky's low quality advertisement-ridden programs at an excessive cost, not to mention their callous pricing behaviour for long-standing customers. Yet, it's merely just tall poppy syndrome - thanks for pointing me right on this (-;

Show me excessive cost and callous pricing behaviour. Show me ROIC greater than WACC. Show me the amount of cumulative returns since inception compared to WACC.

Care to show me what the counterfactual would have been over the last 25 years???

Sixth Labour Government - "Vision without Execution is just Hallucination"

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#1557762 23-May-2016 09:57

dafman:

tdgeek:

MikeB4: I believe what is very evident in the whole anti Sky thing is ..."I want it, I want it now and I don't want to pay for it" mentality.

It is clear looking at Sky's financial returns that they are not making excessive margins on their products. Their overheads and costs are huge. Take for example the cost of outside live coverage of sport, it is hugely expensive and something TVNZ was happy to get out of.

yep, its the tall poppy syndrome, something to complain about. I find it fascinating, to watch what will play out in the move to SVOD, in full or in part.

Geez, here I was thinking I was complaining about Sky's low quality advertisement-ridden programs at an excessive cost, not to mention their callous pricing behaviour for long-standing customers. Yet, it's merely just tall poppy syndrome - thanks for pointing me right on this (-;

No worries! :-) Ads exist elsewhere, and pricing for loyal customers is the same. You should see Sky Sports UK ads. Man. No relation either I dont th nk

ockel

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#1557766 23-May-2016 10:06

tdgeek:

dafman:

tdgeek:

MikeB4: I believe what is very evident in the whole anti Sky thing is ..."I want it, I want it now and I don't want to pay for it" mentality.

It is clear looking at Sky's financial returns that they are not making excessive margins on their products. Their overheads and costs are huge. Take for example the cost of outside live coverage of sport, it is hugely expensive and something TVNZ was happy to get out of.

yep, its the tall poppy syndrome, something to complain about. I find it fascinating, to watch what will play out in the move to SVOD, in full or in part.

Geez, here I was thinking I was complaining about Sky's low quality advertisement-ridden programs at an excessive cost, not to mention their callous pricing behaviour for long-standing customers. Yet, it's merely just tall poppy syndrome - thanks for pointing me right on this (-;

No worries! :-) Ads exist elsewhere, and pricing for loyal customers is the same. You should see Sky Sports UK ads. Man. No relation either I dont th nk

Nope no relation. Sky NZ is a fully NZ owned and operated broadcaster. SkyUK is 40% owned by 20th Century Fox (spun off from Newscorp)

Sixth Labour Government - "Vision without Execution is just Hallucination"

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#1557772 23-May-2016 10:15

dafman:

tdgeek:

MikeB4: I believe what is very evident in the whole anti Sky thing is ..."I want it, I want it now and I don't want to pay for it" mentality.

It is clear looking at Sky's financial returns that they are not making excessive margins on their products. Their overheads and costs are huge. Take for example the cost of outside live coverage of sport, it is hugely expensive and something TVNZ was happy to get out of.

yep, its the tall poppy syndrome, something to complain about. I find it fascinating, to watch what will play out in the move to SVOD, in full or in part.

Geez, here I was thinking I was complaining about Sky's low quality advertisement-ridden programs at an excessive cost, not to mention their callous pricing behaviour for long-standing customers. Yet, it's merely just tall poppy syndrome - thanks for pointing me right on this (-;

Excessive pricing and "callous pricing behaviour" hmmm

May I ask something, on your investments and retirement savings such as Kiwi Saver etc what return on those investments are you wanting?

dafman

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#1557895 23-May-2016 12:24

MikeB4:

dafman:

tdgeek:

MikeB4: I believe what is very evident in the whole anti Sky thing is ..."I want it, I want it now and I don't want to pay for it" mentality.

It is clear looking at Sky's financial returns that they are not making excessive margins on their products. Their overheads and costs are huge. Take for example the cost of outside live coverage of sport, it is hugely expensive and something TVNZ was happy to get out of.

yep, its the tall poppy syndrome, something to complain about. I find it fascinating, to watch what will play out in the move to SVOD, in full or in part.

Geez, here I was thinking I was complaining about Sky's low quality advertisement-ridden programs at an excessive cost, not to mention their callous pricing behaviour for long-standing customers. Yet, it's merely just tall poppy syndrome - thanks for pointing me right on this (-;

Excessive pricing and "callous pricing behaviour" hmmm

May I ask something, on your investments and retirement savings such as Kiwi Saver etc what return on those investments are you wanting?

I’m talking customer service; you’re taking shareholder return.

On the former. Companies that provide consumers with quality products, that people want, at a competitive price, while managing costs, will generally provide a very good return to shareholders over time.

On the latter. Companies that provide customers with a perceived low quality product, at a perceived expensive price, will generally not do too well for shareholders in the long run.

I put Sky in the firmly in the latter category - and it looks like the market broadly agrees given the double digit decline in share value over recent history. The Sky business model and pricing structure has now been surpassed by newer innovations, so arguing that their pricing has to remain at historical levels to compensate investors is a not a sustainable proposition.

networkn

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#1557904 23-May-2016 12:38

I’m talking customer service; you’re taking shareholder return.

On the former. Companies that provide consumers with quality products, that people want, at a competitive price, while managing costs, will generally provide a very good return to shareholders over time.

On the latter. Companies that provide customers with a perceived low quality product, at a perceived expensive price, will generally not do too well for shareholders in the long run.

I put Sky in the firmly in the latter category - and it looks like the market broadly agrees given the double digit decline in share value over recent history. The Sky business model and pricing structure has now been surpassed by newer innovations, so arguing that their pricing has to remain at historical levels to compensate investors is a not a sustainable proposition.

I am in two minds about your comments.

Plenty of companies, esp those with monopolies or significant market share have survived in the "long term" doing what you are suggesting. I am unsure what term you consider long, but there is a significant list. Almost no company can survive without evolving to market conditions, and those who are too slow, generally are goners in the long term.

Sky has been too slow to react to the market in my opinion, and shareholders will have been a contributing factor, if they had decided earlier to invest in newer platforms, their returns would have been affected sooner. HOWEVER, If the CxO suite had failed to meet shareholder priorities, they would have been removed long ago.

I think that Sky has known this devaluation was coming and have prepared for it, happy to take the position they have and dealing with the consequences. I doubt it's too late for Sky, and I think they will adapt albeit slower than the "wisdom" offered by the members of GZ.

Despite your claims and the claims of the others here, there is no EASY answer for Sky. Their content costs will continue to increase, and there is only so much they can afford to do to retain existing customers or attract new customers.

The new deals @ $49 approx with sport included are EXCEPTIONAL value, I couldn't be happier, but I can understand people who spend $120-140 a month (as we used to) feeling unhappy.

MikeB4

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#1557909 23-May-2016 12:54

To address customer service, This morning I decided to adjust what Sky services I am receiving, it took approximately 5 minutes on the phone and the change was instant, I maybe mistaken but that seems like good service to me.

Now the alternatives, Netflix generally a aging library that costs $12 plus , Lightbox, a very limited range. QuickFlix, limited range at odd pricing regime.

Sky offers a wide and large range of content over a range of delivery options, they pay taxation locally and have a considerable NZ work force. They support many charities and sporting groups. They also support local talent.

Sharesies kids

Free kids accounts - trade shares and funds (NZ, US) with Sharesies (affiliate link).

ockel

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#1557914 23-May-2016 13:05

dafman:

MikeB4:

dafman:

tdgeek:

MikeB4: I believe what is very evident in the whole anti Sky thing is ..."I want it, I want it now and I don't want to pay for it" mentality.

It is clear looking at Sky's financial returns that they are not making excessive margins on their products. Their overheads and costs are huge. Take for example the cost of outside live coverage of sport, it is hugely expensive and something TVNZ was happy to get out of.

yep, its the tall poppy syndrome, something to complain about. I find it fascinating, to watch what will play out in the move to SVOD, in full or in part.

Geez, here I was thinking I was complaining about Sky's low quality advertisement-ridden programs at an excessive cost, not to mention their callous pricing behaviour for long-standing customers. Yet, it's merely just tall poppy syndrome - thanks for pointing me right on this (-;

Excessive pricing and "callous pricing behaviour" hmmm

May I ask something, on your investments and retirement savings such as Kiwi Saver etc what return on those investments are you wanting?

I’m talking customer service; you’re taking shareholder return.

On the former. Companies that provide consumers with quality products, that people want, at a competitive price, while managing costs, will generally provide a very good return to shareholders over time.

On the latter. Companies that provide customers with a perceived low quality product, at a perceived expensive price, will generally not do too well for shareholders in the long run.

I put Sky in the firmly in the latter category - and it looks like the market broadly agrees given the double digit decline in share value over recent history. The Sky business model and pricing structure has now been surpassed by newer innovations, so arguing that their pricing has to remain at historical levels to compensate investors is a not a sustainable proposition.

So a company that builds itself to selling products to almost 50% of households is not providing a quality product that people want, at a competitive price? Any company that provides consumers with quality products that people want, at a competitive price, while managing costs, will need to build high barriers to entry for new competitors or those shareholder returns will be eroded back to WACC.

Sky has delivered 10yr annualised returns to shareholders of 1.8%, 5yr returns of 1.7%, and 3 yr returns of -2.2% - in the years to Jun 15 it would have been 5%, 11.5% and 15%. So until there has been evidence of new entrants and the reducing in barriers to entry it has delivered an adequate return to shareholders during its building period. Its peak return on equity has been 13.65% (not at cost of equity imho and never enough to compensate for the years of not meeting cost of equity while building a business).

Your view on product and pricing are your opinion. Clearly there are households that havent agreed and dont agree with your view - else Sky would not have been able to build its business.

And no-one is arguing that Sky's pricing has to remain at historical levels. You're claiming excessive pricing and "callous pricing behaviour" without providing anything other than your personal opinion. Once again please provide evidence of your claim.

Sixth Labour Government - "Vision without Execution is just Hallucination"

dafman

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#1558001 23-May-2016 15:01

ockel:

dafman:

MikeB4:

dafman:

tdgeek:

MikeB4: I believe what is very evident in the whole anti Sky thing is ..."I want it, I want it now and I don't want to pay for it" mentality.

It is clear looking at Sky's financial returns that they are not making excessive margins on their products. Their overheads and costs are huge. Take for example the cost of outside live coverage of sport, it is hugely expensive and something TVNZ was happy to get out of.

yep, its the tall poppy syndrome, something to complain about. I find it fascinating, to watch what will play out in the move to SVOD, in full or in part.

Geez, here I was thinking I was complaining about Sky's low quality advertisement-ridden programs at an excessive cost, not to mention their callous pricing behaviour for long-standing customers. Yet, it's merely just tall poppy syndrome - thanks for pointing me right on this (-;

Excessive pricing and "callous pricing behaviour" hmmm

May I ask something, on your investments and retirement savings such as Kiwi Saver etc what return on those investments are you wanting?

I’m talking customer service; you’re taking shareholder return.

On the former. Companies that provide consumers with quality products, that people want, at a competitive price, while managing costs, will generally provide a very good return to shareholders over time.

On the latter. Companies that provide customers with a perceived low quality product, at a perceived expensive price, will generally not do too well for shareholders in the long run.

I put Sky in the firmly in the latter category - and it looks like the market broadly agrees given the double digit decline in share value over recent history. The Sky business model and pricing structure has now been surpassed by newer innovations, so arguing that their pricing has to remain at historical levels to compensate investors is a not a sustainable proposition.

So a company that builds itself to selling products to almost 50% of households is not providing a quality product that people want, at a competitive price? Any company that provides consumers with quality products that people want, at a competitive price, while managing costs, will need to build high barriers to entry for new competitors or those shareholder returns will be eroded back to WACC.

Sky has delivered 10yr annualised returns to shareholders of 1.8%, 5yr returns of 1.7%, and 3 yr returns of -2.2% - in the years to Jun 15 it would have been 5%, 11.5% and 15%. So until there has been evidence of new entrants and the reducing in barriers to entry it has delivered an adequate return to shareholders during its building period. Its peak return on equity has been 13.65% (not at cost of equity imho and never enough to compensate for the years of not meeting cost of equity while building a business).

Your view on product and pricing are your opinion. Clearly there are households that havent agreed and dont agree with your view - else Sky would not have been able to build its business.

And no-one is arguing that Sky's pricing has to remain at historical levels. You're claiming excessive pricing and "callous pricing behaviour" without providing anything other than your personal opinion. Once again please provide evidence of your claim.

Correct, my comments are my opinion. Other opinions are available.

Earlier in this thread I outlined, in detail, why Sky's pricing is, in my opinion, callous and excessive. Can't be bothered re-treading.

ockel

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#1558014 23-May-2016 15:21

dafman:

Correct, my comments are my opinion. Other opinions are available.

Earlier in this thread I outlined, in detail, why Sky's pricing is, in my opinion, callous and excessive. Can't be bothered re-treading.

Great, so your reiteration of your opinion was equally as pointless to rehash. I could rehash my opinion that Sky is value and that the average Sky subscriber gets good value (as outlined and illustrated in my previous posts) but I wont as it doesnt add any more to the discussion.

Sixth Labour Government - "Vision without Execution is just Hallucination"

dafman

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#1558040 23-May-2016 15:58

ockel:

dafman:

Correct, my comments are my opinion. Other opinions are available.

Earlier in this thread I outlined, in detail, why Sky's pricing is, in my opinion, callous and excessive. Can't be bothered re-treading.

Great, so your reiteration of your opinion was equally as pointless to rehash. I could rehash my opinion that Sky is value and that the average Sky subscriber gets good value (as outlined and illustrated in my previous posts) but I wont as it doesnt add any more to the discussion.

Ok, let's agree to disagree on this one. Though, I will note that it's a real pity for Sky that the good value it's providing to the average Sky subscriber isn't being reflected in its share price of late.

tdgeek

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#1558052 23-May-2016 16:21

dafman:

ockel:

dafman:

Correct, my comments are my opinion. Other opinions are available.

Earlier in this thread I outlined, in detail, why Sky's pricing is, in my opinion, callous and excessive. Can't be bothered re-treading.

Great, so your reiteration of your opinion was equally as pointless to rehash. I could rehash my opinion that Sky is value and that the average Sky subscriber gets good value (as outlined and illustrated in my previous posts) but I wont as it doesnt add any more to the discussion.

Ok, let's agree to disagree on this one. Though, I will note that it's a real pity for Sky that the good value it's providing to the average Sky subscriber isn't being reflected in its share price of late.

As we all know, thats due to the streaming competitors finally making traction on Sky. It hasnt till now, so no need for Sky to react till now. It was inevitable, but no need to fix it until it matters. Sky's own SVOD are I feel setup for when this matters, which is now. They are well placed to react, lets see what they do in coming months. Yes Neon ain't great, but thats not important, its in place. They can HD it they can Neulion it, they can re hash how and what they deliver. You can bet this has been discussed at Sky for many months. The expected transition is now.

ockel

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#1558054 23-May-2016 16:29

dafman:

ockel:

dafman:

Correct, my comments are my opinion. Other opinions are available.

Earlier in this thread I outlined, in detail, why Sky's pricing is, in my opinion, callous and excessive. Can't be bothered re-treading.

Great, so your reiteration of your opinion was equally as pointless to rehash. I could rehash my opinion that Sky is value and that the average Sky subscriber gets good value (as outlined and illustrated in my previous posts) but I wont as it doesnt add any more to the discussion.

Ok, let's agree to disagree on this one. Though, I will note that it's a real pity for Sky that the good value it's providing to the average Sky subscriber isn't being reflected in its share price of late.

Share price is share price - its not even something that management should be focused on. When it went up to 550 on programmed trading cos of some stock screening method - not fair value. When it went sub-400 post downgrade and the programmed traders had to sell on the momentum - not fair value. Probably somewhere in-between IMHO. Value will out in the end. If you think the model is broken and its not worth 420 then short the stock. That you dont seem to be able to illustrate your understanding of business models - I suggest that maybe you keep your money in the bank.

Sixth Labour Government - "Vision without Execution is just Hallucination"

dafman

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#1558059 23-May-2016 16:40

ockel:

dafman:

ockel:

dafman:

Correct, my comments are my opinion. Other opinions are available.

Earlier in this thread I outlined, in detail, why Sky's pricing is, in my opinion, callous and excessive. Can't be bothered re-treading.

Great, so your reiteration of your opinion was equally as pointless to rehash. I could rehash my opinion that Sky is value and that the average Sky subscriber gets good value (as outlined and illustrated in my previous posts) but I wont as it doesnt add any more to the discussion.

Ok, let's agree to disagree on this one. Though, I will note that it's a real pity for Sky that the good value it's providing to the average Sky subscriber isn't being reflected in its share price of late.

Share price is share price - its not even something that management should be focused on. When it went up to 550 on programmed trading cos of some stock screening method - not fair value. When it went sub-400 post downgrade and the programmed traders had to sell on the momentum - not fair value. Probably somewhere in-between IMHO. Value will out in the end. If you think the model is broken and its not worth 420 then short the stock. That you dont seem to be able to illustrate your understanding of business models - I suggest that maybe you keep your money in the bank.

Thanks for the investment advice (-;

tdgeek

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#1558065 23-May-2016 16:57

dafman:

ockel:

dafman:

ockel:

dafman:

Correct, my comments are my opinion. Other opinions are available.

Earlier in this thread I outlined, in detail, why Sky's pricing is, in my opinion, callous and excessive. Can't be bothered re-treading.

Great, so your reiteration of your opinion was equally as pointless to rehash. I could rehash my opinion that Sky is value and that the average Sky subscriber gets good value (as outlined and illustrated in my previous posts) but I wont as it doesnt add any more to the discussion.

Ok, let's agree to disagree on this one. Though, I will note that it's a real pity for Sky that the good value it's providing to the average Sky subscriber isn't being reflected in its share price of late.

Share price is share price - its not even something that management should be focused on. When it went up to 550 on programmed trading cos of some stock screening method - not fair value. When it went sub-400 post downgrade and the programmed traders had to sell on the momentum - not fair value. Probably somewhere in-between IMHO. Value will out in the end. If you think the model is broken and its not worth 420 then short the stock. That you dont seem to be able to illustrate your understanding of business models - I suggest that maybe you keep your money in the bank.

Thanks for the investment advice (-;

A slight chuckle here sorry :-) But at the end of the da its quite a simple history. Successful, no rorting, for many years. Now they need to alter the technology, and pass the cost savings back to SVOD price levels, and they will. No choice. Whether thats SVOD only or a mix, no idea. Remove Sport subsidy too. Increase value add ons. All to happen in near time

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