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  Reply # 1853898 28-Aug-2017 11:12
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Assuming Sky gets close to collapse(which I am sure it wont), does the government have any role to play in the broadcast of sports via TVNZ or TV 3?

 

Doesnt the UK insist on free to air broadcast of certain sports events?


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  Reply # 1853899 28-Aug-2017 11:12
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tdgeek:

 

To aid concluding this thread, Sky cant wake up, as the costs they incur cannot really be reduced by any significant factor. Most of it is sports, so even if they tinkered with pricing, they will still need the same revenue. If some wish to leave as they would rather forego Sky content and watch something different to save money that's fine.

 

 

Which is one of the key reasons they are on deep trouble. If they reduce prices meaningfully then this slices into their already-low and the loss of margin devastates their bottom line. If they don't reduce costs then they bleed subscribers; which also slices into their ARPU as high fixed costs (Optus lease, sports production, business overheads) need to be recovered from an ever-smaller number of subscribers, driving per-subscriber costs steadily upwards.

 

They need to somehow try and retain customers and maintain average per-customer revenue. Which requires a focus on pricing mix and value for money.

 

They probably need to re-balance prices (sports higher; basic, movies and SoHo lower) as sports fans are "sticky", movies and drama are where they are facing mounting cut-price competition, and where subscribers are most likely to leave if they don't end the cross-subsidy.

 

They also need to improve the fundamental user experience, to improve value-for-money by an alternative to price cuts. This, to my mind, means a number of things: getting rid if the ads interrupting programmes; making HD a base-level thing, and improving the functionality of their decoders (eg, including a DLNA server, removal of copy protection on the analog outputs, ability to expand storage etc); and stop interrupting the pogrammes with banners, promos, and "accelerated flow" credit voiceovers. They should also realise that streaming isn't going away, and another way to keep customers "on the hook" would be to push out Lightbox and Netflix apps to their set top box, so at least they get to clip the ticket.

 

Or they could do nothing, wither and die. Which, frankly, seems to be the current strategy.

 

networkn:

 

 Maybe that doesn't matter as much to some people. I do wonder however, how big a deal piracy of the series on their channel SOHO is. I do wonder how people watch GOT for example if not for Sky, is it on FTA?

 

 

 

Depends on your definition of Piracy. Some people watch it on SoHo, or at friends who have SoHo. Some have VPNs and watch it on cheaper paid overseas streaming channels (which I don't regard as piracy). Some torrent or stream it in ways that clearly are piracy. Piracy is still clearly a meaningful thing. But, I venture to suggest, with the rise of affordable and accessible legal streaming options the evidence suggests that piracy rates are falling not rising.

 

It is also on FTA (Prime). But with at least a years extra delay, obnoxious shouty ads inserted every few minutes, and bits cut out to keep the censorship brigade happy and fit it to a time slot once the ads are inserted. So, on balance, a pretty poor viewing alternative to all other options.


 
 
 
 


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  Reply # 1853913 28-Aug-2017 11:31
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JimmyH:

 

tdgeek:

 

To aid concluding this thread, Sky cant wake up, as the costs they incur cannot really be reduced by any significant factor. Most of it is sports, so even if they tinkered with pricing, they will still need the same revenue. If some wish to leave as they would rather forego Sky content and watch something different to save money that's fine.

 

 

Which is one of the key reasons they are on deep trouble. If they reduce prices meaningfully then this slices into their already-low and the loss of margin devastates their bottom line. If they don't reduce costs then they bleed subscribers; which also slices into their ARPU as high fixed costs (Optus lease, sports production, business overheads) need to be recovered from an ever-smaller number of subscribers, driving per-subscriber costs steadily upwards.

 

They need to somehow try and retain customers and maintain average per-customer revenue. Which requires a focus on pricing mix and value for money.

 

They probably need to re-balance prices (sports higher; basic, movies and SoHo lower) as sports fans are "sticky", movies and drama are where they are facing mounting cut-price competition, and where subscribers are most likely to leave if they don't end the cross-subsidy.

 

They also need to improve the fundamental user experience, to improve value-for-money by an alternative to price cuts. This, to my mind, means a number of things: getting rid if the ads interrupting programmes; making HD a base-level thing, and improving the functionality of their decoders (eg, including a DLNA server, removal of copy protection on the analog outputs, ability to expand storage etc); and stop interrupting the pogrammes with banners, promos, and "accelerated flow" credit voiceovers. They should also realise that streaming isn't going away, and another way to keep customers "on the hook" would be to push out Lightbox and Netflix apps to their set top box, so at least they get to clip the ticket.

 

Or they could do nothing, wither and die. Which, frankly, seems to be the current strategy.

 

 

 

 

Not in deep trouble, they lost a small %. Previous years it been very small. yes, low margin is exposure.

 

At $12 per month per subscriber they cant drop HD as they pay Optus extra for that. Any small price decrease, say $10 per month means goodbye profit. As is very clear here, if they added features, that wont make one iota of difference, its only about the money. And Joe Average now sees the standard price is $14 per month

 

 

 

Sky should shift pricing around but they cant make it cheaper, its already quite cheap, based on what it costs to provide sport. If people decide not to watch sport and watch 3 year old movies every night instead, I guess thats fine and Sky can then shut down. It may downsize, buy back some shares and do sport only. And save some cash by shutting down satellite and be SVOD only so that everyone will be happy its not using 80's tech.


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  Reply # 1853923 28-Aug-2017 11:37
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Has anyone suggested a two-tiered viewer experience, as in much cheaper SD broadcasts with obnoxious ads, coupled with high quality ad-free more expensive 'prime' broadcast of same content, and using the higher price of this to subsidise the below-cost low quality version?

 

 





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  Reply # 1853926 28-Aug-2017 11:42
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tdgeek:

 

 

 

Not in deep trouble, they lost a small %. Previous years it been very small. yes, low margin is exposure.

 

At $12 per month per subscriber they cant drop HD as they pay Optus extra for that. Any small price decrease, say $10 per month means goodbye profit. As is very clear here, if they added features, that wont make one iota of difference, its only about the money. And Joe Average now sees the standard price is $14 per month

 

 

 

Sky should shift pricing around but they cant make it cheaper, its already quite cheap, based on what it costs to provide sport. If people decide not to watch sport and watch 3 year old movies every night instead, I guess thats fine and Sky can then shut down. It may downsize, buy back some shares and do sport only. And save some cash by shutting down satellite and be SVOD only so that everyone will be happy its not using 80's tech.

 

 

You beat me to it. They don't have $10 a month spare to drop the price of HD Ticket. I suspect next round with Optus, they will get a much better deal, but it won't allow them to drop $20 a month. 

 

SVOD only won't be an option. There are dozens of thousands of people in NZ, maybe even hundreds of Thousands where their internet will not allow for SVOD. Satelittle will remain for foreseeable future. Just cause it's 80's tech doesn't make it not the best solution for the problem!

 

 


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  Reply # 1853928 28-Aug-2017 11:44
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Rikkitic:

 

Has anyone suggested a two-tiered viewer experience, as in much cheaper SD broadcasts with obnoxious ads, coupled with high quality ad-free more expensive 'prime' broadcast of same content, and using the higher price of this to subsidise the below-cost low quality version?

 

 

 

 

Haha, yeah, everyone here is complaining about $10 for HD, no chance they would pay an even bigger premium. The ad's are not that bad. Better than FTA ad's at least. I always record what I want to watch and fast forward through the ads anyways hardly a hardship

 

 

 

 


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  Reply # 1853942 28-Aug-2017 11:58
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networkn:

 

tdgeek:

 

 

 

Not in deep trouble, they lost a small %. Previous years it been very small. yes, low margin is exposure.

 

At $12 per month per subscriber they cant drop HD as they pay Optus extra for that. Any small price decrease, say $10 per month means goodbye profit. As is very clear here, if they added features, that wont make one iota of difference, its only about the money. And Joe Average now sees the standard price is $14 per month

 

 

 

Sky should shift pricing around but they cant make it cheaper, its already quite cheap, based on what it costs to provide sport. If people decide not to watch sport and watch 3 year old movies every night instead, I guess thats fine and Sky can then shut down. It may downsize, buy back some shares and do sport only. And save some cash by shutting down satellite and be SVOD only so that everyone will be happy its not using 80's tech.

 

 

You beat me to it. They don't have $10 a month spare to drop the price of HD Ticket. I suspect next round with Optus, they will get a much better deal, but it won't allow them to drop $20 a month. 

 

SVOD only won't be an option. There are dozens of thousands of people in NZ, maybe even hundreds of Thousands where their internet will not allow for SVOD. Satelittle will remain for foreseeable future. Just cause it's 80's tech doesn't make it not the best solution for the problem!

 

 

 

 

100%

 

I figure SVOD only will save $8 a month, maybe a bit more by dumping dishes. The rural people is a quandary. Good on them, having Sky to piggy back on, but thats more luck than planning. Id prefer to keep satellite myself, and a great Optus deal will save some coin. I'd like them to centralise to one warehouse, I cannot get why they have brick and mortar across the country, when all they do there is pickup and give out decoders.


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  Reply # 1853946 28-Aug-2017 12:03
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tdgeek:

 

networkn:

 

tdgeek:

 

 

 

Not in deep trouble, they lost a small %. Previous years it been very small. yes, low margin is exposure.

 

At $12 per month per subscriber they cant drop HD as they pay Optus extra for that. Any small price decrease, say $10 per month means goodbye profit. As is very clear here, if they added features, that wont make one iota of difference, its only about the money. And Joe Average now sees the standard price is $14 per month

 

 

 

Sky should shift pricing around but they cant make it cheaper, its already quite cheap, based on what it costs to provide sport. If people decide not to watch sport and watch 3 year old movies every night instead, I guess thats fine and Sky can then shut down. It may downsize, buy back some shares and do sport only. And save some cash by shutting down satellite and be SVOD only so that everyone will be happy its not using 80's tech.

 

 

You beat me to it. They don't have $10 a month spare to drop the price of HD Ticket. I suspect next round with Optus, they will get a much better deal, but it won't allow them to drop $20 a month. 

 

SVOD only won't be an option. There are dozens of thousands of people in NZ, maybe even hundreds of Thousands where their internet will not allow for SVOD. Satelittle will remain for foreseeable future. Just cause it's 80's tech doesn't make it not the best solution for the problem!

 

 

 

 

100%

 

I figure SVOD only will save $8 a month, maybe a bit more by dumping dishes. The rural people is a quandary. Good on them, having Sky to piggy back on, but thats more luck than planning. Id prefer to keep satellite myself, and a great Optus deal will save some coin. I'd like them to centralise to one warehouse, I cannot get why they have brick and mortar across the country, when all they do there is pickup and give out decoders.

 

 

I imagine they have leases to worry about, so they can only close them as those expire. Also every store closure, job losses. 

 

Also prevents installers having to carry stock. Some of the installers I deal with I wouldn't trust with a pile of decoders, however if it is simply drop off pickup decoders, with what they would save in closures, they could spend on good quality delivery free of charge.


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  Reply # 1853956 28-Aug-2017 12:25
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A fun thought experiment might be to imagine setting up a rival service and figuring out how to beat Sky at their own game. For example, keep a stripped-down satellite service for those with no alternative, just reduced frame rate SD, a few channels, only selected sport, low price. By limiting the satellite offerings bandwidth needs could be minimised, saving on cost. Or compress the bejeezus out of it and rebuild in the decoder. Keep signal quality to an absolute minimum but still watchable. Reduced program choice but still something, FTA, one film channel, some sport, a couple of added channels. Then put all the good stuff on streaming, with premium options for best quality, no ads, etc. The cheapest basic dish package would be very cheap, partially subsidised by the more expensive options. People could choose to pay for the quality they wanted. On streaming the basic subscription would be free but all content would be PPV on an individual basis. Each programme you watch, whether TV, film, sport, whatever, would be charged against your account after the first five minutes free. How would something like that work out cost-wise?

 

 





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  Reply # 1853960 28-Aug-2017 12:33
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Rikkitic:

 

A fun thought experiment might be to imagine setting up a rival service and figuring out how to beat Sky at their own game. For example, keep a stripped-down satellite service for those with no alternative, just reduced frame rate SD, a few channels, only selected sport, low price. By limiting the satellite offerings bandwidth needs could be minimised, saving on cost. Or compress the bejeezus out of it and rebuild in the decoder. Keep signal quality to an absolute minimum but still watchable. Reduced program choice but still something, FTA, one film channel, some sport, a couple of added channels. Then put all the good stuff on streaming, with premium options for best quality, no ads, etc. The cheapest basic dish package would be very cheap, partially subsidised by the more expensive options. People could choose to pay for the quality they wanted. On streaming the basic subscription would be free but all content would be PPV on an individual basis. Each programme you watch, whether TV, film, sport, whatever, would be charged against your account after the first five minutes free. How would something like that work out cost-wise?

 

 

 

 

 

 

They still have the same costs, buy the rights, buy the Satellite space, develop or by a set top box, pay the productions costs and other overheads and provide a ROI......... I doubt a competitor could do much cheaper. Just like the cover charge on a newspaper barely covers distribution cost, the subscription to a service free of ads would not cover costs and certainly not cover cross subsidisation.





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Take My Advice, Pull Down Your Pants And Slide On The Ice!

 

 


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  Reply # 1853962 28-Aug-2017 12:35
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MikeB4:

 

Rikkitic:

 

A fun thought experiment might be to imagine setting up a rival service and figuring out how to beat Sky at their own game. For example, keep a stripped-down satellite service for those with no alternative, just reduced frame rate SD, a few channels, only selected sport, low price. By limiting the satellite offerings bandwidth needs could be minimised, saving on cost. Or compress the bejeezus out of it and rebuild in the decoder. Keep signal quality to an absolute minimum but still watchable. Reduced program choice but still something, FTA, one film channel, some sport, a couple of added channels. Then put all the good stuff on streaming, with premium options for best quality, no ads, etc. The cheapest basic dish package would be very cheap, partially subsidised by the more expensive options. People could choose to pay for the quality they wanted. On streaming the basic subscription would be free but all content would be PPV on an individual basis. Each programme you watch, whether TV, film, sport, whatever, would be charged against your account after the first five minutes free. How would something like that work out cost-wise?

 

 

 

 

 

 

They still have the same costs, buy the rights, buy the Satellite space, develop or by a set top box, pay the productions costs and other overheads and provide a ROI......... I doubt a competitor could do much cheaper. Just like the cover charge on a newspaper barely covers distribution cost, the subscription to a service free of ads would not cover costs and certainly not cover cross subsidisation.

 

 

How many SVOD services have been setup and failed. None of the network based SVOD like Starz/HBO is making any money overseas according to a source I trust. The problem is, they hide the fact amongst other financial reporting.

 

 


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  Reply # 1854010 28-Aug-2017 13:33
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networkn:

 

dafman:

 

 

 

Err, I'm simply contributing to this thread as I fully agree with the OP - ie. time to wake up Sky and smell the coffee. I ain't moving on (-;

 

 

Right, but the thread is titled that Sky claims it's woes are due to Piracy. There is a strong consensus that isn't the case. 

 

I have seen nothing from you except "die die die" which isn't constructive. You (as best I can tell) haven't come up with a solution to the issue given the cost structures that aren't likely to go down any time soon, and you have said you aren't happy paying what Sky charges. Not really sure what you expect ?

 

BTW contributing in my mind is adding something of value (or adding something at all), "die die die" doesn't fit into that category for me, does it for you? Seems more like a troll.

 

 

 

 

I don't subscribe to Sky, so I am confined to watching the occasional test match on Prime. I gave up before the final whistle on Saturday because of the delayed coverage - both at the start and then by dragging out the 90 min game with excessive advertisements.

 

So, yes, I look forward to the day Sky is no more and a SVOD service picks up the ball. So, yes, die (a single death, not "die die die") is my preferred outcome. And I think a realistic option is for Sky to voluntarily dissolve at some future point with a cash distribution to shareholders, rather than hanging around for extra years, bleeding shareholder cash and upsetting punters with increasingly poor service (relative to the competition).


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  Reply # 1854013 28-Aug-2017 13:41
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Rikkitic:

 

Keep signal quality to an absolute minimum but still watchable. Reduced program choice but still something ...

 

 

This is the current Sky offering.





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  Reply # 1854019 28-Aug-2017 13:50
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The other issue with this is that the consumer who subscribes to 2 (or more) of these services then pays twice for the same content?

 

 

 

Plus I DONT WATCH SPORT, so don't want Amazon/Nflix etc. take on the sport as they might then BECOME Sky if they 'bundle' it with the content I actually DO subscribe to them for... and make me sub in toward 'your' sports again ;)


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  Reply # 1854232 28-Aug-2017 18:04
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There is, in my opinion, a false assumption from the supporters of Sky in this debate - and that is that sports rights cost what they cost, and this has to be paid.

 

I actually think that the costs of sport, especially rugby in NZ, has been fuelled by Sky bidding to win it exclusively, because without it they would die.  They know (incorrectly or otherwise) that they have a captive market, including those who pay for Basic and subsidise Sport.  So, they can afford to pay huge sums for sports rights and pass these on to the customers.

 

What if they didn't do this?  What if Sky currently pay $100M for NZ Rugby (a number I just made up), then they go out of business next month and the next highest bid for rugby rights is $40M from TVNZ or Amazon?  Do we think NZ rugby would say "stuff you", close up shop and there would be no more rugby in NZ?  Or perhaps could another model be found which incoporates less money, more subscribers and more diverse providers?

 

I think if you step away from the current assumptions - ie huge rights costs and geographic exclusive broadcast rights - there may be different answers.  Not all of which will involve Sky


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