Sky TV reports loss while streaming subscribers grow

Sky’s goal is growth and its core ambition is to be in the hands and hearts of all New Zealanders according to its 2019 Annual Report released today.

“Building on strong foundations, over the past six months we’ve refocused our priorities and embarked on a transformation that we believe will enhance our position for the long term,” reads the report.

For the year ended 30 June 2019, Sky is reporting a net loss after tax of $607.8 million with revenue decreasing to $795.1 million after a 6.8 percent drop since the previous year.

Included in the net loss was a decision to write off $670 million of goodwill. Last year it had a net loss of $240.7 million.

The board has also decided to not pay a dividend for the final six months of FY19, reflecting the investment focus of the business.

“Our business is poised to compete vigorously for, and to win key sports rights, to introduce new digital services and to invest in better experiences for our customers. We are asking our shareholders to support us in our strategy to invest to grow,” chief executive officer Martin Stewart said.

Looking at its revenue, it saw losses in ‘Residential – Satellite’, ‘Advertising’, and ‘Installation and other revenue’.

It cites fewer satellite customers, a lower uptake of premium services and lower pay-per-view purchases, and a reduction in the price of Sky’s basic entry-level package as the reason for a decrease in Residential subscription revenue.

Meanwhile, advertising sales revenue decreased by 9.2 percent to $51.8 million in 2019 due to a general weakening of market conditions for advertising expenditure.

The only revenue growth was in ‘Other subscription revenues’, which was up 16.4 percent to reach $98.6 million.

Included in this category are subscriptions services such as Neon and Fan Pass.

Over the year, Sky saw greater than 50 percent growth in streaming subscribers.

Reflecting on the year, Stewart, who has been in control since February, said: “In the last six months a significant amount of progress has been made, and it’s only the beginning.”

He said it’s entering into FY20 with optimism and energy, citing a number of new sports offers including new Sky Sport Now app and the new Sky Sport News service.

It’s also changed its Sky Sport offer with 12 HD channels, acquired key sports rights like the Cricket Australia deal, and has a new deal with BBC.

A highlight of the year for Sky was seeing over a million New Zealanders engaged with Sky services on the night of the Bledisloe Cup match, including 55,000 on our streaming services.

Over the last year, Sky has streamed almost 11,000 live sports events.

And looking into the future, it’s this streaming it wants to continue to grow.

“People talk about streaming being the future. Well, the future is happening right now, and we are the premier sport streaming service in New Zealand,” Stewart said.

“Our laser focus on streaming, coupled with our commitment to super-serve all Sky customers, is the pathway to creating a long term sustainable entertainment business that balances the needs of our customers and the desires of our content partners, and delivers on behalf of our shareholders.”

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