Sky Television writes off $670m of 'goodwill', suspends dividend

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#2303743 22-Aug-2019 12:26

MikeB4:

And when Mediaworks and TVNZ have gone the way off the Dodo we really will have something to cry about as all our entertainment and news will be in the hands of offshore entities that don't give a toss. The fragmented mess that will be streaming services will be the nightmare that will be our only choice. We will be dished up a range of unrealistic reality TV, trite current affairs shows and news that is largely irrelevant to New Zealand.

There's no reason why you have to get all your entertainment offshore. You can watch NZ-created content on YouTube or whatever. If you're worried about using an offshore streaming service, there's nothing to stop you (or any other Kiwi) from setting up your own.

This very much parallels the disruption of the music industry. The big record labels once controlled the production and distribution of music. CD-writing destroyed the production oligopoly, and the Internet freed up distribution. Now no-one cares about the record labels, and anyone who wants to can set up their own recording studio. Contrary to predictions by the big labels, the music industry hasn't collapsed in a heap.

TV companies once controlled distribution of video content; now they don't. Life will go on.

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#2303814 22-Aug-2019 13:16

For me all these changes are moving chairs on the titanic.

I want 4k. Realistically who buys a non 4k tv these days...

All this talk about premium this and premium that is marketing spin.

The ending of the 4k compatible internet box was significant. (I was surveyed about it last year)

A large backward step.

I am a customer and I would pay extra for a 4k stream.

I would value that more than watching school boy rugby and old cricket test matches from years ago.

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#2304013 22-Aug-2019 17:42

sbiddle:

I see Sky being in a good place now, and with the massive fragmentation occuring people are realising Sky aren't as evil as some said they were.

Even if Sky turn into the corporate equivalent of Mother Theresa or Ghandi I'm not convinced it's sufficient to balance everything they've done over theyears.

The fragmentation that's happening is not a good thing. It's not good for customers for obvious reasons, but it's not really good for the companies either because people will simply chose the one or two providers they like, and pirate anything not available on those providers.

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#2304016 22-Aug-2019 17:47

Fragmenation is bad, but at least the new CEO realises Sky isn't the only game in town anymore, and is doing something about it. John probably would have just kept on doing what he was doing, ie, trying to keep things exactly as they were, but puzzled as to why subscribers (and profits) just kept on declining...with no clue on how to arrest the decline.

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#2304017 22-Aug-2019 17:49

All they will do is partner with other companys by including apps of Disney, Netflix etc etc and bundle so that they all get delivered by Skys box in one way or another.

e.g add disney + netflix for $10 extra per month etc

tdgeek

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#2304018 22-Aug-2019 17:50

sbiddle:

Dingbatt: So the fiddling has stopped and they are putting the fires out. How much of Rome is left standing is yet to be seen.

A lot is left.

I see Sky being in a good place now, and with the massive fragmentation occuring people are realising Sky aren't as evil as some said they were.

What I and others have preached for years @networkn @ockel

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#2304021 22-Aug-2019 17:58

Dingbatt:
sbiddle:

Dingbatt: So the fiddling has stopped and they are putting the fires out. How much of Rome is left standing is yet to be seen.

A lot is left.

I see Sky being in a good place now, and with the massive fragmentation occuring people are realising Sky aren't as evil as some said they were.

I agree, but there needed to be a small course correction a while back rather than "full left rudder" just as the iceberg touches the bow.

Well, over 600,000 customers is nice to have, ALL PAYING. They might focus on sport, they might have a Netflix priced option for general TV, they might go sport only.

The goodwill is a nice tax break, its a paper number. I predicted they might reduce the size of the business. Rugbypass is a great idea.Its diversification globally. Post RWC rugger may get a boost. What else globally? That may feed into the local market. If they can make a good global impact, then NZ can ride on the back of that as "just" another market, making possibly the NZ business easier to manage, by back feeding "international" content for us, as part of the global business.

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#2304022 22-Aug-2019 18:09

surfisup1000:

I predict Sky will keep shrinking until it is similar to Sparks lightbox. I don't see that sky technology can do better than netflix , amazon , disney etc. It will come down to content, particularly live sport.

Even the once-advantage of having a settop box in customer homes has become a disadvantage now that smart-tv's are maturing to the point of being usable. But, Sky don't want to relinquish the satellite distribution as this caters for the 15% of people who can't get fast internet.

I wonder if new content will become harder to procure. Content providers and studios can reach consumers through their own VOD platforms, and geographical content rights go the way of the dinosaur.

But, a good CEO can probably rescue Sky... but they'd have to be very very good.

1. Content? NF etc, have heaps of content, most of it is filler. Most is old, They churn TV out like a Model T, so getting good content is not easy.

2. STB. So that MySky is for the 15% was poor internet? So 600,000 people in NZ who have Sky, have poor internet? Add in the others that don't have/cant have, they also have poor internet?

3. Smart TVs are maturing??? I assume you are serious. Smart TV';s get low support and fair enough. Who wants to sell a smart TV today and mess around supporting apps for 10 years? No one, that why apps like YouTube stop. The "smart" move is to buy a low cost puck that delivers. If it stops delivering who cares, buy another

4. I wonder if new content will become harder to procure. Content providers and studios can reach consumers through their own VOD platforms, and geographical content rights go the way of the dinosaur.

Thats not a Sky problem, that applies to all SVOD providers

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#2304064 22-Aug-2019 18:13

MikeB4:

And when Mediaworks and TVNZ have gone the way off the Dodo we really will have something to cry about as all our entertainment and news will be in the hands of offshore entities that don't give a toss. The fragmented mess that will be streaming services will be the nightmare that will be our only choice. We will be dished up a range of unrealistic reality TV, trite current affairs shows and news that is largely irrelevant to New Zealand.

Yeah but we can then choose between Love Island Lithuania and Love Island Uganda. It will be great. If I want to watch a modern, informed piece of content, i'll put aside an hour to search for it.

tdgeek

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#2304066 22-Aug-2019 18:14

Dratsab:

MikeB4: And when Mediaworks and TVNZ have gone the way off the Dodo we really will have something to cry about as all our entertainment and news will be in the hands of offshore entities that don't give a toss. The fragmented mess that will be streaming services will be the nightmare that will be our only choice. We will be dished up a range of unrealistic reality TV, trite current affairs shows and news that is largely irrelevant to New Zealand.

You're currently being dished up all that 'reality' TV tripe now by TVNZ and Mediaworks - it's the majority of their programming. With streaming services that stuff will simply be available; you choose whether to watch it or not.

Its not the majority. Its a choice. Like you can choose between similar choices on ANY provider.

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#2304069 22-Aug-2019 18:17

Apsattv:

All they will do is partner with other companys by including apps of Disney, Netflix etc etc and bundle so that they all get delivered by Skys box in one way or another.

e.g add disney + netflix for $10 extra per month etc

And the problem is?

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#2304083 22-Aug-2019 18:33

I've been impressed by Martin Stewart so far and actually think he is going to do great things with Sky. I think it's clear they are going to focus on being a specialist sports broadcaster. Let's not forget the infrastructure they have to film live sport and produce really good content.

I cancelled my stb recently and subscribed to sky sports now and its brilliant. It can be improved but for the half the price it's great.

I believe Sky prevail in the battle with spark. Infact I wonder if they even see them as legitimate contenders in the long term?

ockel

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#2304125 22-Aug-2019 19:22

MileHighKiwi: I've been impressed by Martin Stewart so far and actually think he is going to do great things with Sky. I think it's clear they are going to focus on being a specialist sports broadcaster. Let's not forget the infrastructure they have to film live sport and produce really good content.

I cancelled my stb recently and subscribed to sky sports now and its brilliant. It can be improved but for the half the price it's great.

I believe Sky prevail in the battle with spark. Infact I wonder if they even see them as legitimate contenders in the long term?

The average streamin subscriber delivered $150 pa revenue last year. Sky says that the average cost of content per subscriber is $414. Do you really think Sky wiil prevail cos thats not a sustainable business model. Either Sky has to drastically reduce its content costs (and you can work out whats going to happen to subscribers) or its got to raise prices (not possible in a market that doesnt value content) or its going bust. You work out whether you think Sky will prevail.

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#2304136 22-Aug-2019 19:36

ockel:

MileHighKiwi: I've been impressed by Martin Stewart so far and actually think he is going to do great things with Sky. I think it's clear they are going to focus on being a specialist sports broadcaster. Let's not forget the infrastructure they have to film live sport and produce really good content.

I cancelled my stb recently and subscribed to sky sports now and its brilliant. It can be improved but for the half the price it's great.

I believe Sky prevail in the battle with spark. Infact I wonder if they even see them as legitimate contenders in the long term?

The average streamin subscriber delivered $150 pa revenue last year. Sky says that the average cost of content per subscriber is $414. Do you really think Sky wiil prevail cos thats not a sustainable business model. Either Sky has to drastically reduce its content costs (and you can work out whats going to happen to subscribers) or its got to raise prices (not possible in a market that doesnt value content) or its going bust. You work out whether you think Sky will prevail.

Sky's streaming customers will provide $40 x 12 $480 pa. Some of these will pay $50 per month for less months. Many will pay full service, as they use the MySky. Goodwill has been written off. Im not sure where the $150 pa revenue last year comes from.

After the write off they made money. If Joe bought a $40 SSN sub tomorrow, its $40 per month net to Sky. Yes, I have also quoted profit per sub per month in the past, but its ALL about revenue. My example here is $40, not $40 less costs. The costs are already there, with or without that extra sub. The key is will I (who pays full service) drop to SSN or not? If I do, and Sky now gets $40 instead of $100, how many NEW bods sign up? if I cost Sky $60 per month in terms of lost revenue, but 2 other bods sign up and pay $80, then it works.

ockel

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#2304181 22-Aug-2019 19:52

tdgeek:

ockel:

MileHighKiwi: I've been impressed by Martin Stewart so far and actually think he is going to do great things with Sky. I think it's clear they are going to focus on being a specialist sports broadcaster. Let's not forget the infrastructure they have to film live sport and produce really good content.

I cancelled my stb recently and subscribed to sky sports now and its brilliant. It can be improved but for the half the price it's great.

I believe Sky prevail in the battle with spark. Infact I wonder if they even see them as legitimate contenders in the long term?

The average streamin subscriber delivered $150 pa revenue last year. Sky says that the average cost of content per subscriber is $414. Do you really think Sky wiil prevail cos thats not a sustainable business model. Either Sky has to drastically reduce its content costs (and you can work out whats going to happen to subscribers) or its got to raise prices (not possible in a market that doesnt value content) or its going bust. You work out whether you think Sky will prevail.

Sky's streaming customers will provide $40 x 12 $480 pa. Some of these will pay $50 per month for less months. Many will pay full service, as they use the MySky. Goodwill has been written off. Im not sure where the $150 pa revenue last year comes from.

After the write off they made money. If Joe bought a $40 SSN sub tomorrow, its $40 per month net to Sky. Yes, I have also quoted profit per sub per month in the past, but its ALL about revenue. My example here is $40, not $40 less costs. The costs are already there, with or without that extra sub. The key is will I (who pays full service) drop to SSN or not? If I do, and Sky now gets $40 instead of $100, how many NEW bods sign up? if I cost Sky $60 per month in terms of lost revenue, but 2 other bods sign up and pay $80, then it works.

How much of the results presentation and annual report have you read? You're assuming that streaming subs are all SSN (and not Neon Tv or Neon TV/Movie subs). And that they stay on for a full 12 months (rather than subscribing on a casual basis). Take a look at earnt streaming revenues for Fy19 and the average streaming subscriber base for FY19 and do the math. Its fact, not conjecture.

Sky made money from its legacy satellite business - some 79% of revenues come from satellite. Revenues went down. Costs went where? And profit went where? What happens when more go from sat to streaming? Less revenue, no change in costs. Do the math.

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