Better the devil you know: Sky and TVNZ in digital TV cahoots?

They’re often seen as arch-rivals, but, in what appears to be a prime case of keeping your friends close and your enemies closer, TVNZ and Sky are thought to have snuggled up for a new digital TV product called Igloo that could be launched before the end of the year. 

Eric Kearley, TVNZ’s head of digital, who’s all over the public broadcaster’s digital content strategy, said “that’s news to me” when asked about the rumoured deal and said “no” when asked if there was a new product coming out before the digital switchover begins in 2012. Sky’s comms manager Tony O’Brien said it never comments on market speculation and whenever anything of import happens the first place it announces it is the stock market. He wouldn’t comment on a story in the Herald in late August that mentioned “Project Purple”, “a plan to provide a lower-cost pay TV option to get people who want more than Freeview but aren’t prepared to pay for a full Sky satellite package”.

Of course, there’s already something of a joint venture in place at the moment, with TVNZ’s Heartland and Kidzone channels both being shown on the Sky platform. And, rather than compete with separate products and offers, our sources believe the two networks are set to release a box that will feature basic content from Sky and additional content from TVNZ.

It’s estimated there are digital TVs and receivers in around 79 percent of Kiwi houses at present and Sky had 48 percent market penetration as of June. But not everyone can afford the full package. Sky’s digital and wholesale numbers have dipped significantly in the past couple of years, with overall growth maintained by increasing numbers of MySky subscribers. So it would make sense to try and bump up the numbers by reaching into the middle ground with a cheaper offer.

It also makes sense for TVNZ. It is operating more and more like a commercial broadcaster these days, but it’s still smarting from the $15 million whoopsie that was TiVo. The major problems with it were the confusing offer and lack of enticing content, so this alliance with Sky could be a happy medium for both entities.

Rumblings about Sky’s possible interest in buying MediaWorks have been denied by Sky, but two private broadcasters joining forces for a project like this would seem to be a more logical fit. According to another source, however, the prospect of such an alliance scared the bejeesus out of the TVNZ powers that be, so it may be an attempt to pre-empt such a deal and avoid being left out in the cold.

As for the advertising, it’s thought the product was shown around a few different agencies recently and Barnes, Catmur & Friends and Sugar are rumoured to be in the running.

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