Sky TV to buy Orcon ?

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jamesrt

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#147277 14-Jun-2014 13:39

So, the latest rumour is that Sky TV is going to buy Orcon...

http://www.stuff.co.nz/business/industries/10158672/Sky-TV-may-enter-internet-market

Thoughts?

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#1065544 14-Jun-2014 14:19

I think this would be a silly move.

Assuming the article is right and the price is about $30m, I imagine they would be able to acquire 60k customers for a lot less than $30m just building their own ISP.

It will also make for interesting developments with Vodafone's current Sky relationship, as there would seem to be pretty large conflict of interest there.

So I think it is not true, but I guess we'll find out.

networkn

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#1065565 14-Jun-2014 14:35

I always thought it would be impossible for Orcon to get worse, but turns out I was wrong.

I could be wrong, but one company with terrible customer service buying another company with bad customer service sounds pretty grim.

afe66

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#1065566 14-Jun-2014 14:38

Very bad idea for online content competition.

Expect to pass with token restrictions from commerce commission.

Donations....Donations + spineless politicians.

A.

Lyderies

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#1065597 14-Jun-2014 15:41

networkn: I always thought it would be impossible for Orcon to get worse, but turns out I was wrong.

I could be wrong, but one company with terrible customer service buying another company with bad customer service sounds pretty grim.

I have never had any problems with Orcons CS :)

I'm going to noob myself past judgement

pinkydot

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#1065599 14-Jun-2014 15:45

I have lost count on how many times Orcon being bought & sold...

gehenna

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#1065605 14-Jun-2014 15:56

I just disconnected Sky, so if this were true I'd be disconnecting Orcon too. Can't see how a company that monopolises TV content owning an ISP would be any good for customers, especially those customers that like to get their content from alternative sources.

insane

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#1065613 14-Jun-2014 16:12

For a company the size of SKY it makes sense to jump start their entrance into the broadband market through acquisition, would take them too many years to learn how to run an ISP otherwise, let alone win a decent sized user base.

Assuming the rumor is even true.

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JimmyH

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#1065614 14-Jun-2014 16:13

Interesting rumour, but one which surprises me. On the face of it, it doesn't seem like a great business strategy.

I would have thought they would be better off by simply selling the set top boxes and subscriptions, and doing deals with the main ISPs about connectivity and data charges for people who use them.

Going with Orcon would potentially make doing a deal less attractive to other ISPs (which would now also be competitors), put customers of other ISPs off subscribing (ie most internet users & existing sky customers), and potentially invoke the ire of the Commerce Commission if there were allegations that they were leveraging off a dominant market position in content. Plus, they would be diversifying into something that is distinctly not their core business/expertise.

Partnering with ISPs on a non-discriminatory basis would save the up front $30m (which they could use to fund the STBs etc), not create tensions with the non-Orcon ISPs that they would presumably also want to reach the customers of, and have less danger of provoking the Commerce Commission.

So, it may be true, but I'm not sure I see the logic?

richms

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#1065657 14-Jun-2014 17:54

Sky is an ISP in the UK so why wouldnt it work here too?

Richard rich.ms

sbiddle

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#1065661 14-Jun-2014 18:03

The word in the street is there has been a lot of interest in Orcon but nobody wants to pay anywhere near the value it was sold for last year. Even last year there were several interested parties who got very close to making the deal but at a figure well below what Orcon was sold for. Ultimately the big value of an ISP is the cost per customer.

It really intrigues me that Sky would buy an ISP when the startup costs to build one would be a fraction of the $30 million cost of buying somebody.

Are 60000 customers important if you already have more than 10x that and could build an ISP for $5 - $10 million (depending on exactly what you want to offer) and potentially get 5% of your customer base to switch to you with product bundling?

MikeB4

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#1065682 14-Jun-2014 19:19

If Sky gets a grip on the HD internet service in NZ they will wreck it like they have broadcast TV.

Sideface

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#1065688 14-Jun-2014 19:33

Sad.
I like Orcon.

I don't like Sky.

I hope that the rumours are just rumours.
Bad news for consumers (if true).

Sideface

NonprayingMantis

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#1065692 14-Jun-2014 19:42

if true, who wants to run the sweepstake on how long it will be from the time they take over to the time Orcon removes all reference to accessing Netflix from it's site? 1 day? or less?

JimmyH

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#1065726 14-Jun-2014 20:58

KiwiNZ: If Sky gets a grip on the HD internet service in NZ they will wreck it like they have broadcast TV.

I'm not sure how you think Sky have "wrecked" broadcast TV?

FTA broadcasting is kind of a slowly declining industry around the world, with pay TV and streaming services taking bites out of the advertiser base that they depend on selling to advertisers. But, the trouble is, many people don't want to suffer ads in their films and sports matches. Other than offering stiff competition for viewers and programme rights, I'm not sure it's as simple as laying the state of broadcast TV exclusively at Sky's door. Also, in NZ, FTA TV has always been pretty appalling - with shows offered years after the rest of the world etc.

Having said that, I wouldn't want a Sky internet TV service if Sky was the ISP as well. I would be depending on the availability of alternatives such as Netflix, iPlayer and Hulu to keep the competitive heat on them, and keep their pencil sharp on pricing and programming offering. If they were my ISP, I suspect that all the geolocking workarounds would suddenly stop working.

richms

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#1065728 14-Jun-2014 21:02

They have wrecked broadcast tv by giving us shoddy overcompressed SD feeds that are way behind in what they have compared to other markets.

If they get into online streaming it will be aweful like quickflix is.

Richard rich.ms

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