Sky NZ steady but new services slow

Rose Major

Sky TV New Zealand, the News Corp-backed pay-TV platform operating as a virtual monopoly in the country, may have pay-TV sewn up but doesn’t seem to be setting the world alight with its high-definition TV package.

Announcing its annual results on Friday, the company said that of 778,902 subscribers at the end of June, 85,681 had a MySkyHDi set-top box installed. MySkyHDi launched in August 2008.

But not all MySkyHDi subscribers are also paying for a high-definition TV package. In fact, just 58% - around 50,000 – are doing so. While that may seem a reasonable figure in a small market (Sky’s 778,902 subscribers equal 47.2% of NZ homes), rival free-to-air platform Freeview New Zealand recently announced that its digital-terrestrial HD platform was now in 87,720 homes, up 17,061 in the last quarter.

Another cloud is that pay-per-view buys have fallen off as the recession has bitten. The percentage of subs who purchase a title each month has dropped from 27% in the previous year to 23% for this period. Just over 1.8 million PPV buys were purchased in (year to June) 2009 compared to just over 2 million in the previous year.

Overall, however, Sky NZ’s business is robust – as one would hope given its position in the market. Revenues rose 5% to NZ$692 million, with ARPU up 3.1% to NZ$64 a month and MySky subscribers (over 100,000 overall, including those with first-generation standard definition set-tops) spending NZ$78.02 a month.

Operating costs rose 10% to NZ$431 million as the company launched HD and also commissioned a new server-based digital television station. These developments, said Sky NZ, introduced a new layer of fixed costs to the business, but added “the benefits of which will be realised as an increasing number of subscribers choose these new services”.

EBITDA stood at NZ$261 million, from the previous year’s NZ$266.6 million. Net profit fell 12.7% to NZ$125.8 million.

Interestingly, one area in which Sky NZ doesn’t seem to have prospered is mobile TV. Its Sky Mobile TV service on the Vodafone 3G network lost subscribers during the year, ending June on 7,800 subs, compared with 8,427 at June 30 2008.