Sam Aldred says the 'Sky' might soon be falling on New Zealand broadcasters' heads

  • Opinion
  • June 8, 2016
  • Sam Aldred
Sam Aldred says the 'Sky' might soon be falling on New Zealand broadcasters' heads

Two years ago Sky TV was on the ropes, cut loose by the News Corp mother ship, sports content under threat, no sign of a digital strategy and a challenger preparing to launch from the deep pockets of Spark. 

What a difference two years make. Subscriber numbers are down (as is the share price) but its competitors have failed to capitalise. NZRU and New Zealand Cricket have signed multi-year contract renewals, Sky has launched three new digital platforms, a set top box upgrade and sports content previously won by third parties looks to be heading back home to Sky Sports. Still, as long as Sky doesn't integrate any further into the content ecosystem, for example by buying an ISP, then everyone is going to be okay. Right?

A Vodafone merger/acquisition has been long rumoured but coming on the back of a renewed Sky TV, it is a blow to Spark and local broadcast media. What next for Spark and its ambition of becoming a digital media company? Where next for Freeview?

As the savvy Kym Niblock said in her editorial last week consumers will likely choose from a suite of products but there is now a danger that users are simply going to substitute a Sky subscription with Neon and seasonal access to Fan Pass. With the marketing power of Vodafone and the ability to deliver bundled Sky content within a data plan this represents a serious challenge for other channels to get heard through the noise. If a Sky/Vodafone entity follows the Sky UK example and launches a Now TV type platform then local broadcasters could once again find themselves beholden to Sky to deliver their content.

What next for the rest of New Zealand media? I suggest a quiet panic and then a regroup. They have lost the fight to take on Sky through content (with the big ticket sport now locked up again for years) so the battle is going to have to fought over ecosystems. If users are going to consume from a few channels then let that be Lightbox/Netflix/TVOD/MW on a renewed Freeview platform rather than any number of Sky packages through a Sky/Vodafone box.

ISPs need something to differentiate themselves from the competition, Sky/Vodafone will potentially now have a big platform to go and acquire customers but there is still plenty of scope for an alternative solution to be created by the other powerful players in the market. Freeview-plus should be looking at how it can become a home for on-demand content outside of its free-to-air shareholders, Lightbox, Netflix, YouTube being the obvious first tier contenders for inclusion. Without this kind of play, New Zealand broadcasters will simply cede platform control to Sky and Google, with the excellent and cheap Chromecast fast becoming the default way to get your TV online.

What is happening in New Zealand is a speeded up version of the media evolution that is happening all over the world. In the space of three years we've had incumbents disrupted, sports rights carved off, OTT services launching and closing (RIP Quickflix, Ezyflix, Premier League Pass) and now we've got the return of the network. It's the likely evolution Netflix will take in the next decade adding news, sport and stealthily increasing the price. Consumers want a good price and good choice but too much choice and it all starts to feel like an expensive chore. 

Having navigated the digital changes and with the addition of an ISP business Sky once again is the dominant player in New Zealand media. It does have weaknesses to be exploited (its brand being probably the biggest) but there is renewed challenge now to the competition and there will have to be a new strategy and sense of urgency for the fight ahead.

  • Sam Aldred is a director at, a specialist internet TV and streaming media strategy and consultancy agency.

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