Spark has today announced that it has entered into an agreement for Sky Network Television Limited (Sky) to purchase its entertainment streaming business, Lightbox.

Matt Bain, Marketing Director for Spark, explains, “Early in 2019, we started a process to identify a local or international media partner who could enhance Lightbox’s content proposition and support its growth, while bringing the best and broadest range of content to our customers.

“In the last five years, there has been significant growth and evolution in the subscription video on demand (SVOD) market. Selling the Lightbox business to Sky ensures a sustainable future for Kiwi SVOD services, while giving us the ongoing ability to provide access to a high-quality TV and movie streaming service, which benefits from a significantly enhanced range of entertainment content from Sky.”

Sophie Moloney, Sky’s Chief Legal, People and Partnerships Officer, says: “This deal enables Sky to merge Lightbox with our own entertainment streaming service Neon to create a supercharged SVOD service for New Zealanders. The new enhanced service will combine the best features of Neon and Lightbox, and offer an outstanding range of entertainment content from New Zealand and around the world in a proudly kiwi way.

“We’re excited at the possibilities the deal presents, and the opportunity to attract new customers to Sky and continue to grow our streaming services. We’re delighted to be partnering with Spark to offer the enhanced service to Spark customers and look forward to revealing more details in 2020.”

A conditional sale and purchase agreement has been signed and completion of the deal is anticipated in the next few months, subject to commercial, legal and regulatory approvals as required.

There will be a transitional period following completion where Spark will continue to provide support for the Lightbox service, as the parties complete technical work to fully transition the platform to Sky.

Spark customers who are currently using Lightbox will continue to receive Lightbox ‘on us’ as part of their eligible mobile and broadband plans both while the deal is concluded and through a transitionary period. Following the transition period, Spark will partner with Sky to make the combined entertainment streaming service available to Spark customers through its broader entertainment offers on mobile and broadband.

Lightbox customers who are paying for the service directly will continue to be able to enjoy the same great content they do today, and once Lightbox becomes part of Sky’s new combined entertainment platform, customers will have access to an enhanced range of entertainment content.

Over the past five years, Lightbox has become New Zealand’s leading local subscription-based entertainment streaming business. Lightbox has been a valuable part of Spark’s offer to mobile and broadband customers, while also attracting customers who purchased the streaming service directly

That's an interesting development. Considering that about half of Lightbox used to be Quickflix.

If Lightbox is merged in with Neon, that sets a further precedent for consolidation in the local streaming market.

Consolidation is probably good.

Depends on how much Sky are going to want us to pay for the service, and how many people will abandon it when it no longer comes as part of their Spark broadband plan.

If they start to want, say $20 for the new 'Neonbox', I will probably quit it, and probably quit Spark at the same time, as I will be able to get my internet cheaper elsewhere (I switched to Spark Unplan Entertainment to get Lightbox and Netflix as part of the plan, if they aren't there, I will probably migrate away again).

The question has to be what was Lightbox actually worth?... 

The vast majority of its customers will be Spark subscribers on free plans, and I cannot see Spark paying any $$$ to Sky in the future to subsidise them , so I suspect most of them will simply evaporate if they are required to pay real $$$ for a subscription...

TVNZ says SVOD will become a bloodbath. This move is actually the opposite, instead of some services closing, a merge is better. Neon users may pay a small amount more to get two sets of content, paying LB users the same. Free LB users may have to pay, but get two for the price of one, and assuming a discount for Spark customers who will be onselling it.

wellygary:

 

The question has to be what was Lightbox actually worth?... 

 

The vast majority of its customers will be Spark subscribers on free plans, and I cannot see Spark paying any $$$ to Sky in the future to subsidise them , so I suspect most of them will simply evaporate if they are required to pay real $$$ for a subscription...

 

I'm sure the service is not 'free'. There will be some internal accounting at Spark to provide lightbox with (at least on paper) revenue.

Whether or not when Sky takes over Spark will divert that revenue out to a third part in subsidies for its customers remains to be seen.

tdgeek:

TVNZ says SVOD will become a bloodbath. This move is actually the opposite, instead of some services closing, a merge is better. Neon users may pay a small amount more to get two sets of content, paying LB users the same. Free LB users may have to pay, but get two for the price of one, and assuming a discount for Spark customers who will be onselling it.

If this actually results in a stronger, more unified service to rival the big players (Netflix, Disney+, Prime Video), I'm all for it. 4k content, 5.1 sound, hiring some UX people; sounds great!

If it's just a quick cash grab for Sky to get more revenue now that it no longer has a stranglehold on content, well then RIP Lightbox. 

interesting what becomes of this.

lightbox gained its share because spark bundled it with their services. not really sure what market share neon has - i know only one person who subscribed (while game of thrones was on).

i have heard from a handful of people lamenting the price increases of netflix. if this comes in at the $15 (or less) pricepoint, it might make some ripples in the pond.

epr:

tdgeek:

 

TVNZ says SVOD will become a bloodbath. This move is actually the opposite, instead of some services closing, a merge is better. Neon users may pay a small amount more to get two sets of content, paying LB users the same. Free LB users may have to pay, but get two for the price of one, and assuming a discount for Spark customers who will be onselling it.

 

I think the bloodbath is amongst the big players in the marketplace as they compete. Amazon, Apple, Disney, Hulu, Netflix this merger is nothing in the scheme of things like comparing goldfish to sharks.

Fair enough,. so Kenrick's comment was silly, just miffed that other players in NZ are innovative

Well there goes another "OK" service down the rat hole.  So Stuff purchased the skeleton of Quckflix and, well, RIP. Sky buys Lightbox, will merge it with Neon not exactly a stellar service, I hear the sounds of distant drums. Spark seems to like messing and dumping, First Media never got out of trial but was excellent, I was a trial user, They played with Tivo for a bit and its mates with the Dodo, now Lightbox is in bed with Sky hmmmm will the marriage last? So, will Spark Sport be gone by Christmas 2021?

Nothing has been mentioned about Spark Sports.... As there is a lot of overlap between the two platforms from my understanding does that mean Spark Sport is also going to be sold to Sky? Or Spark plans to keep that as a separate going concern.

Really interested to know how much it was sold for, as all Spark are buying is the customer base unless Sky plan to kill the Neon product it is only assumed they will merge onto a single platform.

Wow Sky must be desperate after losing all the Disney content lol