Igloo may take six years to break even

Igloo may take up to six years to break even, says TVNZ.

The state broadcaster revealed this information in a written statement to the Commerce Committee, where it says “There is no specific target for sales in the first 12 months as we recognise it could anywhere between 4 – 6 years for the business to reach break-even.” 

Igloo is a joint venture between TVNZ and Sky TV, in which the former stumped $12.3 million for a 49 percent stake in the company.

The set top box service provides viewers with free to air channels, with additional channels for $25 per month. The service is meant to act as a bridge between TVNZ’s free content and Sky’s paid content, giving TVNZ a slice of the lucrative paid TV monopoly held by Sky.

Neither TVNZ nor Sky have confirmed the number of current Igloo customers. Sky initially forecast a grand total of 50,000 subscribers within its first year, this was cut back to a more humble 30,000 figure by chief executive John Fellet in a recent NBR interview.

No doubt a major issue facing Igloo is it teeters on the edge of redundancy. The box is capable of being a digital video recorder (DVR) and recording content for watching later. According to former head Chaz Savage this feature was held back as it could cannibalise Sky’s MySky offering. The DVR functionality and access to TVNZ OnDemand content would make Igloo an formidable product for the state broadcaster, but it seems as long as it has to share Igloo in an awkward custody battle with Sky it will continue to be a hindrance.

What do you think of TVNZ and Sky’s Igloo product? Love it, hate it, never heard of it – let us know.

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