SKT - Sky Network Television

[Mysterion]

Blackrock use to own 10% of Sky before selling out in 2019!!!

[Mysterion]

For punters out there, my last prediction a few days ago (Sky Global Holdings) turned out to be another Fish and Chip shop!

[mistaTea]

MorningStar have had their $3 rating for years!!! They were always above the market consensus and over time as they've stayed the same the market has narrowed to the point were all the brokers are now at the same valuation.

Today's market price is fair value!

MT needs to stop going on about how the market is undervaluing Sky as it's clearly not the case anymore!

Lack of posts by MT at the moment gives me the feeling that he's now selling or at the very least reducing his position to less insane level!

Relax mate I am still here!

Nothing much to really add though. Divvy gets paid out next month and then we wait and see the details of the capital return?

FY results were solid, and guidance seems a lot better than people on the forum have been anticipating?

CAPEX next year will be higher than anticipated, but they will need to play 'catch up' and double down on the new STB roll out since they are way behind schedule now. A key part of their tech roadmap to secure their position as partner/aggregator of choice.

Some of the commentary from Sophie makes me think they have some decent wholesale deals in mind with 3rd Party apps like Amazon Prime etc, and thes kinds of deals will feed into this pricing and packaging overhaul they have been talking about.

SP doing it's noral shenanighans.

The person on the investor club who put a bullish valuation of $5/share...well, all Sky have to do is cancel 50% of the shares and hey presto! We have our five bucks 

[Mysterion]

Bit of news flow today:

https://www.nzherald.co.nz/business/sky-tv-the-high-cost-of-building-a-house-of-content-sees-broadcaster-cop-a-downgrade/F5JROOJ2Z6FQY53K3KULNJKO4E/

https://www.stuff.co.nz/sport/opinion/129685665/sports-fans-with-sky-boxes-still-getting-raw-deal-compared-to-sky-sport-now-customers

https://www.stuff.co.nz/sport/tennis/129687759/game-on-multiple-broadcasters-in-talks-to-show-januarys-asb-classic

https://www.stuff.co.nz/business/129707526/sky-sport-now-users-miss-all-blacks-game-as-app-woes-continue

[mistaTea]

Yeah I saw the mixed revies from the analysts.

I think the higher CAPEX spend for this FY (and therefore lower FCF, and therefore lower divvy) was a surprise.

But, then again, the new STB is very important and we do need to spend now for "dem gainz". As Sophie described in the presso, the high ARPU STB customers + advertisers essentially pay for everything and then the streaming services get to go along for the ride.

So, logically, we want to stop losing any more STB customers and grow the base if we can with a superior user experience and better pricing/packaging.

[Mysterion]

Yeah I saw the mixed revies from the analysts.

I think the higher CAPEX spend for this FY (and therefore lower FCF, and therefore lower divvy) was a surprise.

But, then again, the new STB is very important and we do need to spend now for "dem gainz". As Sophie described in the presso, the high ARPU STB customers + advertisers essentially pay for everything and then the streaming services get to go along for the ride.

So, logically, we want to stop losing any more STB customers and grow the base if we can with a superior user experience and better pricing/packaging.

The media aggregation model is in doubt if the cost of content continues to become more unaffordable. Sky rising their prices will only exacerbate customer losses.

I don't understand how the new STB requires investment. It's just a Google box made in China. Won't customers be charged for the box anyway thus increasing revenue? I think what's really happening is the new Sky box is going to be given away for free, especially to VTV customers and those customers wanting to cut the chord and that's why they say CAPEX is going higher. In other words CAPEX here is really just marketing spend.

[mistaTea]

The media aggregation model is in doubt if the cost of content continues to become more unaffordable. Sky rising their prices will only exacerbate customer losses.

I don't understand how the new STB requires investment. It's just a Google box made in China. Won't customers be charged for the box anyway thus increasing revenue? I think what's really happening is the new Sky box is going to be given away for free, especially to VTV customers and those customers wanting to cut the chord and that's why they say CAPEX is going higher. In other words CAPEX here is really just marketing spend.

The small number of VTV customers may get a deal of some kind for the inconvenience etc.

But as for the rest, there will be some sort of 'MySky' fee I am sure (though I have long said that charging an ongoing $15/month fee forever like they do now is bs. They are better off sorting out their pricing/packaging and just charging a one-off fee if they have to).

I know that when John Fellet was doing the Cisco IV box, the plan was to give customers a choice:

• Upgrade to the new box and keep paying a box rental fee; or
• Keep MySky but no longer pay the rental fee

Be very interesting to see what Sky do now.

But even if they do charge a fee, there is still the upfront CAPEX cost of buying the boxes, having a technician go out to set the box up (potentially install a new satellite if it is a new customer) as well as more software upgrades that are going to be needed.

[Mysterion]

The small number of VTV customers may get a deal of some kind for the inconvenience etc.

But as for the rest, there will be some sort of 'MySky' fee I am sure (though I have long said that charging an ongoing $15/month fee forever like they do now is bs. They are better off sorting out their pricing/packaging and just charging a one-off fee if they have to).

I know that when John Fellet was doing the Cisco IV box, the plan was to give customers a choice:

• Upgrade to the new box and keep paying a box rental fee; or
• Keep MySky but no longer pay the rental fee

Be very interesting to see what Sky do now.

But even if they do charge a fee, there is still the upfront CAPEX cost of buying the boxes, having a technician go out to set the box up (potentially install a new satellite if it is a new customer) as well as more software upgrades that are going to be needed.

Weird that they haven't discussed pricing when the box was already meant to be released by now.

No longer paying the rental fee would reduce ARPU, no? Most customers would opt for the savings over the new box. We've discussed the new box on here before, it average! Nothing to write home about. Most customers won't need to switch.

Just lol at having some guy come out and plug in the box!!!! It's like broadband, the box just shows up and you plug it in to the wall. If it won't work you call tech support.

Software updates, JUST LOL! Seriously, this would all be some out of the box software from 2015!

I find it hard to see any upcoming CAPEX with this box apart from giving it away for free!! 

[Jay]

Not sure what would happen to people like me who paid the 1 off upfront cost for the box, had 1 upgrade for to the HD version which cost nothing - so have no being paying a rental fee, would be given same option(s) no doubt - rental or 1 off

[Mysterion]

Me watching the stock crater



Just lol at all the dummies buying over the last few days

[mistaTea]

https://www.roymorgan.com/findings/9053-new-zealand-pay-tv-services-june-2022-202208290154

New STB, backed up with some wholesale deals with Netflix, Disney+ and Amazon Prime would be compelling for a lot of people I think.

A broadband + entertainment bundle that includes 3rd Party streaming services could be good. And if the new box makes it easy to find content to watch across services, even better.

An IP-only version of the box would suit a lot of people in new builds who don't particularly want a satellite dish on the roof.

[Mysterion]

https://www.roymorgan.com/findings/9053-new-zealand-pay-tv-services-june-2022-202208290154

New STB, backed up with some wholesale deals with Netflix, Disney+ and Amazon Prime would be compelling for a lot of people I think.

A broadband + entertainment bundle that includes 3rd Party streaming services could be good. And if the new box makes it easy to find content to watch across services, even better.

An IP-only version of the box would suit a lot of people in new builds who don't particularly want a satellite dish on the roof.

Solid viewership numbers for Sky but is the business model sustainable in terms of providing a reasonable dividend return to investors over the long term? Maybe, but likely only at the current market cap thus no capital gainz! It's a bit like the old TV3, it had good viewer numbers but couldn't turn a profit by it's former owners, hence the sell out to Discovery. I think PE takeover of Sky for a couple of years and then a sale to WBD is still the best and most logical outcome.

By the time the new box fully rolls out it will be almost considered old tech! If I'm doing a new build I'd rather get SkyGlass TV and have it flush to the wall with no carpentry box underneath. So what happens 5 years from now, does Sky NZ invest more CAPEX in a TV to replace the new STB? Thus the never ending spend trying to make profit as middle man!

[Mysterion]

A takeover at $2.50 post capital return would be an ideal outcome given the broker downgrades. Kiwi dollar right now is weak too!

[Mysterion]

MT right now

[mistaTea]

MT right now

Wow $2.40!

Maybe Mr Market has mistaken investing in skt with playing a game of how low can you go?

Low volumes too. Not a lot of interest in our gal these past two days that's for sure.