Sky Basic split into two packages

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#1968011 4-Mar-2018 21:13

If they dropped the adds and got say a 10% increase in subscribers.

Do they then need to increase cost to keep total revenue the same?

Article looks to be 2016, not sure if that trend is continuing, plus how much of that ad revenue is from Prime, which is free to air.

The other night I was being put off by Sky advertising itself, so not really revenue generating, just seemed to hacking off viewers for their own gratification.

I have no problem with adverts between programs, just don't like the flow being interrupted.

I don't watch much on freeview, but feel adds on there is fair enough, as it's their only revenue source. Sky to me seems to be double dipping.

tdgeek

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#1968019 4-Mar-2018 21:18

ockel:

tdgeek:

@rugrat here we go. I will work out the numbers as I type this as I just found it

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11595797

Sky TV's advertising revenue generated the fastest increase in the half, rising 17 percent to $42.3 million, and now accounts for 8.9 percent of total revenue compared to 7.8 percent a year earlier. That's in a market where television advertising is sinking, with free-to-air players Television New Zealand and MediaWorks bearing the brunt of the decline.

So two years ago it was $42 million. Say subscribers was 800,000, that is $52.50 and for a half year, so $9 per month. I think a good number might pay that.

You honestly think that lifting prices by 18% to have an ad-free service would be something that a good number of people would pay?

Given that pre-Netflix there was 50% of the population that would tolerate ads in return for someone else paying for their content? And that at least half of that population didnt have a PVR to skip those ads.

I think you underestimate how penny-pinching the general population is.

Yes, maybe I do. If it was an option, I think some would take it up. If I had no PVR I would.

tdgeek

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#1968022 4-Mar-2018 21:20

ockel:

ockel:

tdgeek:

@rugrat here we go. I will work out the numbers as I type this as I just found it

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11595797

Sky TV's advertising revenue generated the fastest increase in the half, rising 17 percent to $42.3 million, and now accounts for 8.9 percent of total revenue compared to 7.8 percent a year earlier. That's in a market where television advertising is sinking, with free-to-air players Television New Zealand and MediaWorks bearing the brunt of the decline.

So two years ago it was $42 million. Say subscribers was 800,000, that is $52.50 and for a half year, so $9 per month. I think a good number might pay that.

You honestly think that lifting prices by 18% to have an ad-free service would be something that a good number of people would pay?

Given that pre-Netflix there was 50% of the population that would tolerate ads in return for someone else paying for their content? And that at least half of that population didnt have a PVR to skip those ads.

I think you underestimate how penny-pinching the general population is.

And lets put that in context - the last time Sky lifted its prices (back in 2016) by something like $1.50/month to recoup half of the increase in content costs..... all hell broke loose.

And when the telcos decided to charge customers $0.99/mth to recoup the telco levy... all hell broke loose.

Really? Lifting prices by $9/mth would get front page headlines and all the ex-Sky subscribers screaming blue murder (cos the coveted content just got more expensive so the jealousy and rage froths forth)

What I like is when telco's have the annual CPI increase. Froth. At annual salary review time, no froth!

JimmyH

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#1968024 4-Mar-2018 21:24

tdgeek:

@rugrat here we go. I will work out the numbers as I type this as I just found it

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11595797

Sky TV's advertising revenue generated the fastest increase in the half, rising 17 percent to $42.3 million, and now accounts for 8.9 percent of total revenue compared to 7.8 percent a year earlier. That's in a market where television advertising is sinking, with free-to-air players Television New Zealand and MediaWorks bearing the brunt of the decline.

So two years ago it was $42 million. Say subscribers was 800,000, that is $52.50 and for a half year, so $9 per month. I think a good number might pay that.

Interesting analysis, and many thanks for doing it, but I think your estimate is too high.

I just looked at their annual report. In 2017 advertising revenue was $68.1 million. If which Prime (page 25) apparently contributed $21.4 million. Since Prime is an ad-supported free-to-air channel, I don't think anyone is reasonably arguing that it should go ad free. So that leaves about of ad revenue $46.7 in respect of non-free channels.

I would be OK if they kept ads between shows. It's only the ads interrupting shows or shouted over the credit roll at the end that truly annoy me. So, waving a finger in the air, lets assume that in programme ads correspond to about 60% of revenue, and the balance is between shows. Based on my non-scientific feeling for the split of ads over all (including no in-show ads except for over the credits on SoHo, some on Vibe, and tons on History, Discovery etc). They would keep 40% of the remaining $46.7m (ie $18.7M), and lose $28 million.

So overall ad revenue would drop by about 41%, not 100%. Which, taking the $9 per month from your analysis and scaling this to 41% of your estimate, corresponds to about a $3.69 per month needed to make up the shortfall. I would pay an extra $3.69/month (or even $5/month if my estimates are off) to lose *all* in show ads. No question.

tdgeek

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#1968025 4-Mar-2018 21:24

rugrat:

If they dropped the adds and got say a 10% increase in subscribers.

Do they then need to increase cost to keep total revenue the same?

Article looks to be 2016, not sure if that trend is continuing, plus how much of that ad revenue is from Prime, which is free to air.

The other night I was being put off by Sky advertising itself, so not really revenue generating, just seemed to hacking off viewers for their own gratification.

I have no problem with adverts between programs, just don't like the flow being interrupted.

I don't watch much on freeview, but feel adds on there is fair enough, as it's their only revenue source. Sky to me seems to be double dipping.

Sorry, yes Feb 2016, I meant to add that. Its probably similar still. I doubt people would join Sky if it was ad free. But if you are ok with ads in between, then that $9 per month has got bit less, say $6.50. Thats not a bad price to pay.

Sky aren't double dipping though. Ad revenue takes away a $42 million need to tack that onto the retail price. Its reducing our price to get Sky.

If you are ok with ads on FTA, the ads on Sky are a help to us subscribers. They help keep a lid on the already high price.

tdgeek

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#1968031 4-Mar-2018 21:33

JimmyH:

tdgeek:

@rugrat here we go. I will work out the numbers as I type this as I just found it

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11595797

Sky TV's advertising revenue generated the fastest increase in the half, rising 17 percent to $42.3 million, and now accounts for 8.9 percent of total revenue compared to 7.8 percent a year earlier. That's in a market where television advertising is sinking, with free-to-air players Television New Zealand and MediaWorks bearing the brunt of the decline.

So two years ago it was $42 million. Say subscribers was 800,000, that is $52.50 and for a half year, so $9 per month. I think a good number might pay that.

Interesting analysis, and many thanks for doing it, but I think your estimate is too high.

I just looked at their annual report. In 2017 advertising revenue was $68.1 million. If which Prime (page 25) apparently contributed $21.4 million. Since Prime is an ad-supported free-to-air channel, I don't think anyone is reasonably arguing that it should go ad free. So that leaves about of ad revenue $46.7 in respect of non-free channels.

I would be OK if they kept ads between shows. It's only the ads interrupting shows or shouted over the credit roll at the end that truly annoy me. So, waving a finger in the air, lets assume that in programme ads correspond to about 60% of revenue, and the balance is between shows. Based on my non-scientific feeling for the split of ads over all (including no in-show ads except for over the credits on SoHo, some on Vibe, and tons on History, Discovery etc). They would keep 40% of the remaining $46.7m (ie $18.7M), and lose $28 million.

So overall ad revenue would drop by about 41%, not 100%. Which, taking the $9 per month from your analysis and scaling this to 41% of your estimate, corresponds to about a $3.69 per month needed to make up the shortfall. I would pay an extra $3.69/month (or even $5/month if my estimates are off) to lose *all* in show ads. No question.

Thanks also to you for expanding. My link was Feb 2016, I meant to add that, but wow, the ad revenue is way up for the following year. I revised my guess to $6-50 after removing in show ads. I never considered Prime ad revenue, so drop that down to your figure. $3-69 or $5, yes I'd pay that too.

I read here ages ago, that some shows have preset ad breaks. So instead of Budweiser, proud to be your Bud, we get Briscoes annual sales :-) I have no idea how common this is. As we know from friends that pirated... a one hour show is 42 minutes, so would there be many shows that Sky cannot control the ads in? Or can they edit them out? Or can they run a linear video service where some people have ads and some paid to remove them? Thats probably the main issue on reflection.

matisyahu

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#1968045 4-Mar-2018 22:13

tdgeek:
matisyahu:

As I noted on the exact story on Reddit; provide an Apple TV application and allow people to sign up and stream all the Sky live channels via the internet rather than having to sign a 12 month contract and wait for installation it would be instant gratification. I know for me I'd be more open to Sky if I could do just that but because of all the drama involved with getting it I simply opt for something else.

Very fair point. Multiroom is dumb. Dumb nowadays at least.. Fellett had an article a number of weeks ago, talking where Sky is going, but no detail, but hints. I recall that one thing he said I took as what you are looking at. The issue is that they cannot just drop prices, as they only make $12 or so per subscriber per month. They need to add value, and what you want is adding value. Sky Go rarely has errors now, has improved res also, and 26 odd channels, instead of what was about 6. That may be what you are looking for, and in development but getting there.

Apologies for the slow reply. SkyGo is still a joke - still demanding people use a plugin in 2018 (just tried it then on my Mac laptop running Safari), do Sky TV realise what year this is? Heck, their Neon service is even a bigger insult given that I can't even watch shows like Realtime on their Neon service and yet they have the rights to it since they broadcast it via Soho. I wish I was confident that Sky would head into a 'buy your own set top box and download then app" direction but I'm sceptical given that those at the top are so out of touch and ancient. What Sky needs is a management team at the top that has a forward and modern looking vision for Sky and not folks who think that the internet is only used to set email and check out the weather report.

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tdgeek

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#1968051 4-Mar-2018 22:35

matisyahu:

tdgeek:
matisyahu:

As I noted on the exact story on Reddit; provide an Apple TV application and allow people to sign up and stream all the Sky live channels via the internet rather than having to sign a 12 month contract and wait for installation it would be instant gratification. I know for me I'd be more open to Sky if I could do just that but because of all the drama involved with getting it I simply opt for something else.

Very fair point. Multiroom is dumb. Dumb nowadays at least.. Fellett had an article a number of weeks ago, talking where Sky is going, but no detail, but hints. I recall that one thing he said I took as what you are looking at. The issue is that they cannot just drop prices, as they only make $12 or so per subscriber per month. They need to add value, and what you want is adding value. Sky Go rarely has errors now, has improved res also, and 26 odd channels, instead of what was about 6. That may be what you are looking for, and in development but getting there.

Apologies for the slow reply. SkyGo is still a joke - still demanding people use a plugin in 2018 (just tried it then on my Mac laptop running Safari), do Sky TV realise what year this is? Heck, their Neon service is even a bigger insult given that I can't even watch shows like Realtime on their Neon service and yet they have the rights to it since they broadcast it via Soho. I wish I was confident that Sky would head into a 'buy your own set top box and download then app" direction but I'm sceptical given that those at the top are so out of touch and ancient. What Sky needs is a management team at the top that has a forward and modern looking vision for Sky and not folks who think that the internet is only used to set email and check out the weather report.

Maybe sooner than you think.

"Cisco's software would allow Sky TV itself to become an "app", so Sky could potentially sell it separately from its set-top boxes.

Fellet said that might appeal to people who wanted to access Sky through an iPad and put it up on hotel screens when they were travelling."

https://www.stuff.co.nz/business/industries/101911791/sky-tv-talks-to-netflix-and-amazon-prime-about-bundling-deals

An issue they have is if they knew that they will continue to use Optus or not, and if the recent measure was enough to hold onto subscribers they could draw a line in the sand. A Sky app would solve many issues. They could run linear and also every linear title was OD as well. In an ideal world its the app only. A free STB like now if wanted by some, the app for the rest.

stinger

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#1968052 4-Mar-2018 22:54

tdgeek:

Maybe sooner than you think.

"Cisco's software would allow Sky TV itself to become an "app", so Sky could potentially sell it separately from its set-top boxes.

Fellet said that might appeal to people who wanted to access Sky through an iPad and put it up on hotel screens when they were travelling."

https://www.stuff.co.nz/business/industries/101911791/sky-tv-talks-to-netflix-and-amazon-prime-about-bundling-deals

An issue they have is if they knew that they will continue to use Optus or not, and if the recent measure was enough to hold onto subscribers they could draw a line in the sand. A Sky app would solve many issues. They could run linear and also every linear title was OD as well. In an ideal world its the app only. A free STB like now if wanted by some, the app for the rest.

And with FanPass currently $99/month (and only offering four channels + highlights), I think we'd all pass on that.

tdgeek

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#1968056 4-Mar-2018 23:18

stinger:
tdgeek:

Maybe sooner than you think.

"Cisco's software would allow Sky TV itself to become an "app", so Sky could potentially sell it separately from its set-top boxes.

Fellet said that might appeal to people who wanted to access Sky through an iPad and put it up on hotel screens when they were travelling."

https://www.stuff.co.nz/business/industries/101911791/sky-tv-talks-to-netflix-and-amazon-prime-about-bundling-deals

An issue they have is if they knew that they will continue to use Optus or not, and if the recent measure was enough to hold onto subscribers they could draw a line in the sand. A Sky app would solve many issues. They could run linear and also every linear title was OD as well. In an ideal world its the app only. A free STB like now if wanted by some, the app for the rest.

And with FanPass currently $99/month (and only offering four channels + highlights), I think we'd all pass on that.

I think everyone does. That's why it's priced like that, they tried it, found it added churn so dispensed with it. You can get it for $55 I think for a 6 month contract. You can also get sky sport now for $55 and that's all channels.

eracode

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#1968057 4-Mar-2018 23:19

It’s not just the revenue-generating ads on Sky that irk me, it’s the lengthy promos of other Sky channels every few minutes that really get my goat. Those promos are just as much a reason we try to record as much as possible of what we watch - then skip through the ads and promos.

In the highly unlikely event that Sky developed an ad-free option, or went entirely ad-free, would they cease and desist with promos? If not, they wouldn’t be offering a real (or attractive) solution.

Sometimes I just sit and think. Other times I just sit.

ockel

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#1968235 5-Mar-2018 11:58

eracode: It’s not just the revenue-generating ads on Sky that irk me, it’s the lengthy promos of other Sky channels every few minutes that really get my goat. Those promos are just as much a reason we try to record as much as possible of what we watch - then skip through the ads and promos.

In the highly unlikely event that Sky developed an ad-free option, or went entirely ad-free, would they cease and desist with promos? If not, they wouldn’t be offering a real (or attractive) solution.

Even on those days that advertising is banned by law the ad-funded broadcaster will promote its upcoming content in the inserts. When ad-markets are slow, or when viewers arent being attracted (like late-night or on Duke) then you'll notice multiple promos for upcoming content.

Why? If it doesnt self promote then the viewer doesnt know what content is upcoming. No viewer - no revenue. No revenue - well, you get the idea.

Watch a direct channel feed like ESPN on Sky? Numerous, repetitive promotion of ESPN content. Too numerous to skip most of the time. Why? ESPN wants you to watch ESPN. And increase the value to its broadcaster.

Nat Geo, History, Discovery et al? Loaded with numerous, repetitive promotion of their own upcoming content. Those content generators want you to watch more of their content. Shock horror.

Sky - wants you to watch more Sky content rather than ad-funded broadcasting or direct channel feeds. IMHO Sky is a poor self-promoter compared to TVNZ and Mediaworks. But is has become a better self-promoter compared to the past - and that has been by mimicking the good self-promoters in the sector.

I think slide 34 of the interim results presentation shows exactly what it wants its subscribers to do - year on year on year. Watch more, record more. [BTW I dont truly understand what 142m Hours means in the context of the title (average customer monthly usage) - is that 142 minutes or does the whole sub base watch 142 million hours per month?, but the context is clear - the average sub is watching more each year]

dafman

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#1968246 5-Mar-2018 12:45

ockel:

eracode: It’s not just the revenue-generating ads on Sky that irk me, it’s the lengthy promos of other Sky channels every few minutes that really get my goat. Those promos are just as much a reason we try to record as much as possible of what we watch - then skip through the ads and promos.

In the highly unlikely event that Sky developed an ad-free option, or went entirely ad-free, would they cease and desist with promos? If not, they wouldn’t be offering a real (or attractive) solution.

Even on those days that advertising is banned by law the ad-funded broadcaster will promote its upcoming content in the inserts. When ad-markets are slow, or when viewers arent being attracted (like late-night or on Duke) then you'll notice multiple promos for upcoming content.

Why? If it doesnt self promote then the viewer doesnt know what content is upcoming. No viewer - no revenue. No revenue - well, you get the idea.

Watch a direct channel feed like ESPN on Sky? Numerous, repetitive promotion of ESPN content. Too numerous to skip most of the time. Why? ESPN wants you to watch ESPN. And increase the value to its broadcaster.

Nat Geo, History, Discovery et al? Loaded with numerous, repetitive promotion of their own upcoming content. Those content generators want you to watch more of their content. Shock horror.

Sky - wants you to watch more Sky content rather than ad-funded broadcasting or direct channel feeds. IMHO Sky is a poor self-promoter compared to TVNZ and Mediaworks. But is has become a better self-promoter compared to the past - and that has been by mimicking the good self-promoters in the sector.

I think slide 34 of the interim results presentation shows exactly what it wants its subscribers to do - year on year on year. Watch more, record more. [BTW I dont truly understand what 142m Hours means in the context of the title (average customer monthly usage) - is that 142 minutes or does the whole sub base watch 142 million hours per month?, but the context is clear - the average sub is watching more each year]

I think your eight lines above sum up nicely why so many subscribers are leaving in droves.

rugrat

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#1968247 5-Mar-2018 12:47

It must be the whole customer base. There's only 672 hours in 4 weeks.

The promos Sky have the opposite effect on me, I watch less because it ruins the viewing experience.

How many of those hours watched are Sport v's general entertainment?

They have channel 0 and 28 for people to see what's on, plus they could do it at beginning and end of shows.
Yes Freeview does promo's during program, but Sky does it like they're on Steriods.

invisibleman18

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#1968248 5-Mar-2018 12:47

networkn:
invisibleman18: So not only can I not get the new packages yet as I get it through Vodafone, I just checked my latest bill and they have removed my free Sky Sport discount which should have been for 12 months from August and now charge me for it. Coincidence that it's at the time of all these billing changes or are they being sneaky after 6 months and hoping people don't check and just let the automatic payment go through?

Hit them up on Social Media. Let us know what happens.

Messaged them over Facebook but they haven’t replied so decided to call last night and got through to billing. She looked up my account and found a note saying it expired after 6 months even though it should have been 12 so she reinstated it for another 6 months and sent me a new invoice. Free Sky Sport for 12 months was part of the deal for starting a new Fibre contract which I did when I moved house at the end of June and the new place had fibre installed so I was finally able to change from ADSL. They also got it wrong when it started as they charged me for it on the July bill so I messaged through Facebook and got a reply that it would be corrected from the following month and last for 12 months from then, but they still set it up for 6 months anyway. I don’t always check the bill as it’s the same amount each month so it was only because of the Sky package change that I logged into my Vodafone account to see if my Sky packages had changed names and noticed the amount due was $30 higher than usual so opened the bill.

Also asked about the new Sky packages and she said they are not offering it through Vodafone yet but are looking into it so it should be coming eventually. When flicking through channels last night I found I now have Soho which you are supposed to get if you have both Starter and Entertainment in the new split, so even though I have the old “basic” maybe Vodafone have added that straight away since it would only be as simple as ticking a box. Will check next month’s bill to make sure I haven’t been charged for that when I haven’t ordered it.

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