SKT - Sky Network Television

[Mysterion]

WarnerBros Discovery quarter results

https://s201.q4cdn.com/336605034/files/doc_financials/2022/q2/WBD-2Q22-Earnings-Release-Final.pdf

[Mysterion]

Warner Bros. Discovery reveals plans for free streaming service

HBO Max and Discovery+ programming will be combined

https://www.nytimes.com/2022/08/04/business/media/warner-bros-discovery-earnings.html

[Mysterion]

https://www.hollywoodreporter.com/business/digital/warner-bros-discovery-details-new-streaming-plans-hbo-max-1235192892/

The streaming service is targeting profitability in the U.S. by 2024, and 130 million subscribers by 2025, up from 92 million as of today.

For now, however, streaming is still a money-loser, with the company reporting a $1.5 billion loss in the quarter for its streaming division.

Wall Street and the entertainment world writ large have been wondering about the company's plans, given that it owns and operates 2 major streaming services, HBO Max, and Discovery+. The company had been telegraphing for some time that it planned to ultimately go to market with one major streaming service.

JB Perrette, who leads the company's streaming business, dove into more detail on the plans.

For starters, there will be one service, under one brand, name still to be determined. The U.S. launch will be summer 2023, with Latin America to follow later that year, and Europe and other markets following in 2024.

The service will feature the full "unique and complementary" content libraries of both services, but will use the tech stack of Discovery+, which Perrette said received more positive feedback from users than HBO Max's interface.

He added that the combined service will launch with a "big, noisy" marketing campaign meant to highlight the enormous library of content.

As for the free service, Perrette noted that the company currently licenses much of its content to free AVOD services, but will reevaluate those deals.

"There is much work to be done over coming months," Perrette said. "We are determined to get it right, which will take a bit of time."

Earlier on Thursday, WBD revealed that programming from Magnolia Network would join HBO Max, while some CNN original programming would join Discovery+. That announcement teed up the fact that no merger between the services was imminent.

[mistaTea]

https://www.hollywoodreporter.com/business/digital/warner-bros-discovery-details-new-streaming-plans-hbo-max-1235192892/

"For now, however, streaming is still a money-loser, with the company reporting a $1.5 billion loss in the quarter for its streaming division."

Probably explains 'dem gainz' for Sky today.

[Mysterion]

OK, there's no way WBD is gonna take on more debt and buy some sh*tty TV business in a tiny country at the bottom of the world with a micro population! Even if they were interested they're not going to be paying a premium for it when they are focusing on a new streaming platform, paying down debt, and also cutting costs across the board. Even Batgirl got canned! They're not going to be swapping that for Sky NZ, just lol! They bought TV3 because that was only $20m but even so, they are probably regretting it and likely over paid!

Comcast seems like the only logical buyer because at least they can integrate Sky NZ into Sky UK, but the fact that they haven't registered the trademark "Sky Glass" in NZ but have done so in Australia seems like that's a clear indication they have no desire anytime soon. More likely Comcast would buy Foxtel first (as the IPO has been shelved and vendors want out) and see how things go before buying Sky NZ. But having said that, it was a huge mistake to buy Sky UK in the first place and their shareholders got shafted on that deal. Would Comcast management double down again? Just seems so odd that they would chase the ANZ legacy pay TV market when the future is still streaming. Better to do a partnership and grow streaming organically. Better yet, it makes more sense for them to spin off Sky UK into a separate entity and then for that to merge with Foxtel. It does go against the trend of media consolidation but it makes more sense to integrate pay TV separately on a global scale but keep it all as an aggregation and not content generation company (hard to explain what I'm saying but the point is that Sky is like a cinema and not a movie production company, it just clips the ticket and deals with the customers and serves them popcorn etc). The more I think about it and the more I read the quarterly results from both Comcast and WBS, the more I think a buy out from either one of these companies is unlikely. A takeover makes sense on paper but only with cost synergies and scale, but for customer growth it's better to just do that organically through streaming and not by bolting on legacy set top box customers and all the problems that come with that.

This only leaves PE, which are basically just a middleman trying to get inbetween Sky NZ investors and the global conglomerates. We all know (according to news sources and other users here) they made an offer at $2.30 and the Sky board turned it down. It was a relatively low ball offer at the time and their were legit reasons why the board were right to turn it down but PE didn't increase their offer, which means they are only interested in Sky NZ if it's cheap. With Sky's balance sheet in good working order it seems unlikely that Sky will ever be in a desperate situation again and therefore unlikely to be a takeover target, unless of course it pays out all the cash and increases the dividend and then maybe sometime later they might get into trouble again and then maybe PE make another low ball offer. In other words, a catch-22. Nobody wants to overpay for Sky but also people do see the value in the cash it generates and the possibility of merger/consolidation with other media companies. But again, see points above, it's not as clear cut as buy-merge-rinse-repeat.

At the end of the day it's all about MONEY. As an NZ based retail investor, how can you make 'dem gainz' from all of this crazy sh*t going on! Unless you have the balls to chuck in a huge amount of capital and hope to God a takeover comes at a decent enough premium to justify all the risk (and there is a ton here) then what's the point in investing. The only other option is to invest for yield, which is absolutely crazy to even think of doing when you consider how fragile Sky's market position is and how old and outdated their assets are. Things are at the tailing end like a gold mine that's 80% minded already. Maybe there are some other pockets of gold left over but do you want to take the risk? There are so many better ways to get a return that are also 100x safer than investing in this.

This is where this whole Mediaworks side show comes in. The fact that Sky were even considering buying this to me suggests that there was little interest in a Sky takeover and at the same time it seems logical that there wasn't good revenue growth from either streaming or broadband and that there is still satellite churn causing sustained problems. Throw in the customer service debacle, inflation, cost of living crisis and overseas reports of 'chord cutting' makes the short to medium term outlook cloudy at best. Not to mention NZRU, seriously, what's going on over there, AB suck now, and soccer seems like it's more popular, how much is it going to cost to renew the contact, so many unknowns!

There has been takeover rumors since 2018 and the fact that none of materialized is a concern. It's as if everybody has looked and then either decided no to a takeover or dropped their price to the point where the board declines. Maybe, just maybe, the reason why MW was canned is because PE have made a decent offer and it is under consideration and this was at the exact time as the global market sell off so you would think this might delay an offer. Maybe that's what's happening, the offer is on the table with conditions and things are just waiting for the right time in the not too distance future, i.e. at FY results or later this year near AGM. But then what do they offer, like $3 per share or $2.30 minus cash? Is this what ACC, Jupitar and Fidelty really want? A small buy out after all that pain in holding after all that time? Even Blackcrane seem like they want to wait and see what happens and don't really care either way. Jes*us Ch**st, life as an average Joe retail holder trying to make a living is hard as h*ll! Then you see headlines like HKD meme stock going up 2300%. Even Infratil just climbs higher after buying another solid infrastructure asset that appreciate in value in just 3 months after buying it. Do we really want to hear what Sky management has to say on the 25th of this month? What could they possibly have to say that would even change the slightest thing about Sky or it's outcome as an investment. Why even bother having a presentation. The stock will go up then get sold down again. It will be more BS about the turn around strategy more BS about a capital return that's now looking like it will be a huge fizzer! What's the point! Just delist! Get it off the exchange! Seriously, this stock is a waste of everyone's time. The media hates it, the investors hate it, the customer hate it, everyone hates it! It just needs to go!

If the takeover doesn't happen, they need to merge with Mediaworks and then with NZME, and then with 2Degrees. That's the only way forward from here that doesn't involve PE, WBD, or Comcast. Keep it all NZ based and as large as possbile. That I can see working. Not the best outcome but only way to survive. Sky, MW, NZME, 2Degrees are all under pressure in one way or another. They all need to merge, cut costs and become one! At the moment it's just a game of 'who dies first' and then the other eats the other, real dog eat dog sh*t. The Labour government should just come in a nationalize it all! And then combine it with TVNZ. But just lol at this ever happening! NZ customers just have to live with all the fragmentation. Spark Sport subscotpion and Sky Sport Now subscription etc, lots of middleman etc. More needles ComCom repots, more regulations, more cost of living payments to pay for it all! What a farking joke!

Stuff all this, I'm going back on Trademe to look for more land to buy!!

[Mysterion]

[Plata]

Some upwards movement in the share price these last few days, had to double check I was looking at SKT! Leaky ship with a positive announcement inbound? Catching up to the market bounce?

[mistaTea]

Some upwards movement in the share price these last few days, had to double check I was looking at SKT! Leaky ship with a positive announcement inbound? Catching up to the market bounce?

That would be wonderful news for shareholders if something 'favourable' was announced imminently.

I suspect it is more a case of some retail holders jumping in a couple of weeks before the FY results are released, in the hope of grabbing a decent dividend yield (plus whatever else is in store in terms of capital return).

[Plata]

100k shares just went through @2.47. Not just retail holders jumping in?

[mistaTea]

100k shares just went through @2.47. Not just retail holders jumping in?

Probably just Ogg using some pocket money...

[Mysterion]

Probably just Ogg using some pocket money...

I'd rather buy WBD now.

[Mysterion]

Foxtel results

https://www.adnews.com.au/news/foxtel-s-kayo-and-binge-offset-broadcast-subscriber-falls

[mistaTea]

Foxtel results

https://www.adnews.com.au/news/foxtel-s-kayo-and-binge-offset-broadcast-subscriber-falls

Sky will be much the same. Earnings at top end of guidance, strong growth in streaming. Stable base.

First time revenue growth in years.

And inflation/recession will help Sky relative to a lot of other businesses. As I say, when households are doing it tough...for a lot of people, cancelling their Pay TV is one of the last things to go when they are trying to find ways to save money.

[Mysterion]

Foxtel pretty much saying the similar theme that there continues to be "chord cutting" but it's being offset by increased streaming revenue.

That streaming revenue is benefiting from the price increases, that's why Neon raised it's prices.

Costs increasing but offset by savings in sports rights but likely more costs coming through in FY23.

"We expect cost impacts from continued supply chain and inflationary pressures, together with wage inflation challenges to continue," she said.

"We will take necessary action to address those pressures, including pricing adjustments, together with our ongoing focus on cost management.

[Mysterion]

Sky will be much the same. Earnings at top end of guidance, strong growth in streaming. Stable base.

First time revenue growth in years.

And inflation/recession will help Sky relative to a lot of other businesses. As I say, when households are doing it tough...for a lot of people, cancelling their Pay TV is one of the last things to go when they are trying to find ways to save money.

Results likely to be on "par" but capital return will likely make the stock pop!

be interesting to see how much the stock goes up before results.

Best time to sell would be within the first 10mins after results!