SKT - Sky Network Television

[LoungeLizard]

Also, ads on new smart tvs will be running adds on third party streaming services here in NZ very soon. It's already happening in the US.

[mistaTea]

If you like to watch sport or news would you tune in to Netflix? So not a direct competitor in that sense. In fact they are complimentary - most people who have Sky (for sport etc) will probably also have another streaming platform, perhaps Netflix. They are not substitutes for each other as they offer different things.

Not a full substitute as you say, but enough of a substitute for hundreds of thousands of SNT subs who have changed to OTT in line with their On Demand viewing preferences.

Saying NETFLIX is not a competitor is like saying Spark Sport was not a competitor because they don't offer news, History channel etc.

[Perky]

I notice the content drift has started. National Geographic leaving Sky at end of March and going to it's owners streaming platform Disney +.

Sky has responded by....doing nothing and charging customers same monthly amount for less...guess that's inflation.

This is going to be an ongoing issue for Sky with plethora of streaming platforms.

I hope Sky has deep pockets to buy the sports rights...only need to loose a couple of majors and it's going to be a slippery slope.

Meanwhile Sophie shuffles the deck chairs and tells us they got 1M customers.

Sky had over 800k customers way back in 2010 with a much higher ARPU.

From all my time as a subscriber I just remember my monthly fee reducing...originally I paid over $1oo/ mth, then $96, then $74.

Now Sky getting excited about how many customers paying $36/month for growth in skysportsnow and low margin broadband...you can pretty much buy broadband at your corner dairy now...even spark noted the margin pressure in this space.

I thought the result was ok but I sold my holding for the reasons I outline above

GLTH...
especially warriors fans...you will need it

[mistaTea]

I notice the content drift has started. National Geographic leaving Sky at end of March and going to it's owners streaming platform Disney +.

Sky has responded by....doing nothing and charging customers same monthly amount for less...guess that's inflation.

This is going to be an ongoing issue for Sky with plethora of streaming platforms.

I hope Sky has deep pockets to buy the sports rights...only need to loose a couple of majors and it's going to be a slippery slope.

Meanwhile Sophie shuffles the deck chairs and tells us they got 1M customers.

Sky had over 800k customers way back in 2010 with a much higher ARPU.

From all my time as a subscriber I just remember my monthly fee reducing...originally I paid over $1oo/ mth, then $96, then $74.

Now Sky getting excited about how many customers paying $36/month for growth in skysportsnow and low margin broadband...you can pretty much buy broadband at your corner dairy now...even spark noted the margin pressure in this space.

I thought the result was ok but I sold my holding for the reasons I outline above

GLTH...
especially warriors fans...you will need it

I did smile when I saw how Sky tried to position the loss of National Geographic content - that Sky 'did not renew' the deal.

Closer to the truth I think is that Disney did not offer it for renewal (or wanted an exhorbitant price for it) and prefer to continue down their path of consolidating their large library of content onto their global platform.

Apart from the unfortunate $7M spend on VTV, Sky delivered a good result for the HY. Nothing unexpected in the results - the issues for Sky continues to be "But what now?"

Virtually zero FCF generated, so the ~$20M in divvy and planned buyback will come out of the $56M cash reserves. If I still owned a piece of the company I would be more excited if Management articulated a plan for how they can use the $56M cash + future FCF + reasonable leverage to grow the business (Hint: buying Mediaworks is not the correct answer).

[LoungeLizard]

Not a full substitute as you say, but enough of a substitute for hundreds of thousands of SNT subs who have changed to OTT in line with their On Demand viewing preferences.

Saying NETFLIX is not a competitor is like saying Spark Sport was not a competitor because they don't offer news, History channel etc.

I didn't say they weren't a competitor - just not a like-for-like competitor. SKY should focus on doing what it does best ie. a jack-of-all-trades - rather than worry too much about Netflix, who have their own problems.If Sky can retain their crucial content - rugby, HBO - etc - they have a very viable and profitable business model as being the only sport-news-documentaries-movies-tv aggregator in town. Not everyone wants, or can afford, multiple niche platforms.

[mistaTea]

I didn't say they weren't a competitor - just not a like-for-like competitor. SKY should focus on doing what it does best ie. a jack-of-all-trades - rather than worry too much about Netflix, who have their own problems.If Sky can retain their crucial content - rugby, HBO - etc - they have a very viable and profitable business model as being the only sport-news-documentaries-movies-tv aggregator in town. Not everyone wants, or can afford, multiple niche platforms.

Not to belabour the point, but I was responding to the fact you literally said NETFLIX are not a direct competitor to sky.

I think they are a direct competitor for eyeballs though I do agree with you that they are not a like for like substitute.

And you are right that if Sky can retain a range of content across entertainment and sport that kiwis value, and continue to secure those rights are a reasonable price that allows them to remain profitable then Sky will have a business long term.

I don't see sky tv going anywhere any time soon.

It always gets back to whether or not they will stay a pure content aggregator (and therefore remain in business but continue to shrink over time) or come up with a viable plan to truly transform Sky TV into a vehicle for growth.

[Teitei]

Tell us more about the interest free loan (according to you) shareholders made to the company which has given them more than 100% return in the last two years, mistaTea.

You really are running out of negatives to write about SKT, aren't you?

[LoungeLizard]

I didn't say they weren't a competitor - just not a like-for-like competitor. SKY should focus on doing what it does best ie. a jack-of-all-trades - rather than worry too much about Netflix, who have their own problems.If Sky can retain their crucial content - rugby, HBO - etc - they have a very viable and profitable business model as being the only sport-news-documentaries-movies-tv aggregator in town. Not everyone wants, or can afford, multiple niche platforms.

Not to belabour the point, but I was responding to the fact you literally said NETFLIX are not a direct competitor to sky.

I think they are a direct competitor for eyeballs though I do agree with you that they are not a like for like substitute.

And you are right that if Sky can retain a range of content across entertainment and sport that kiwis value, and continue to secure those rights are a reasonable price that allows them to remain profitable then Sky will have a business long term.

I don't see sky tv going anywhere any time soon.

It always gets back to whether or not they will stay a pure content aggregator (and therefore remain in business but continue to shrink over time) or come up with a viable plan to truly transform Sky TV into a vehicle for growth.

 I didn't say "literally" they weren't a competitor - they are in a very broad sense, in that people have to choose what to watch. But that's where the comparison ends. That's like saying NZ Royal Ballet is a competitor to the NZRU because they both compete for punters to be entertained. But they offer 2 different experiences - you don't choose one over the other.

In the real world, most of the migration from SKY to Netflix etc, has already happened, and at a guess, those were people that didn't follow sport. SKY now have a core following who want to watch live sport - and that core is expanding despite price increases because people recognise that it is still good value compared to the price of tickets. Neon (which I rate) is also attracting viewers. You could say perhaps that Netflix is a direct rival to Neon, just not to Sky as whole.

[mistaTea]

I didn't say "literally" they weren't a competitor - they are in a very broad sense, in that people have to choose what to watch. But that's where the comparison ends. That's like saying NZ Royal Ballet is a competitor to the NZRU because they both compete for punters to be entertained. But they offer 2 different experiences - you don't choose one over the other.

In the real world, most of the migration from SKY to Netflix etc, has already happened, and at a guess, those were people that didn't follow sport. SKY now have a core following who want to watch live sport - and that core is expanding despite price increases because people recognise that it is still good value compared to the price of tickets. Neon (which I rate) is also attracting viewers. You could say perhaps that Netflix is a direct rival to Neon, just not to Sky as whole.

Yes, merit in the neon comparison in terms of like for like. I have made that same argument myself in the past.

Though that is true, it's not quite the whole truth though in my revised option.

And the ever dwindling STB base is a form of proof that the transition to OTT is still evolving (and Netflix is probably still the main competitor people pack sky in for. Amazon Prime growing in popularity too).

When we cut through the noise, we are probably broadly aligned in our thinking on this topic.

[Shareguy]

Good to see the ceo buying back the shares lost with the capital return (38,000).  The board thinks current price is wrong, and way undervalued.  Share buyback starting soon should get the share price firing.


https://www.nzx.com/announcements/407888

[LoungeLizard]

Good to see the ceo buying back the shares lost with the capital return (38,000).  The board thinks current price is wrong, and way undervalued.  Share buyback starting soon should get the share price firing.


https://www.nzx.com/announcements/407888

Share buybacks are supposed to be managed in a way that minimises SP price fluctuation, but with SKy's low liquidity and the Board stating that they will be buying up to 6% of Sky's stock, I can't see how it can't give the SP a bit of a kick. EPS approaching 40c. Cashflow enhanced. All good.

[Teitei]

Share buybacks are supposed to be managed in a way that minimises SP price fluctuation, but with SKy's low liquidity and the Board stating that they will be buying up to 6% of Sky's stock, I can't see how it can't give the SP a bit of a kick. EPS approaching 40c. Cashflow enhanced. All good.

Try buying 6% of SKT - that's in front of the sp action.

[Teitei]

Try buying 6% of SKT - that's in front of the sp action.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SKT/407955/390248.pdf

And Mr Bowman & Sophie decided to help the sp along by buying shares! 

Another 6% buyback next half year and watch the scrip really tighten.

[Shareguy]

Sold my last lot today.  Its been a short but very profitable ride.  Only sold because I needed the money..  Still think share price will go higher with the buy back but could not wait. 

[LoungeLizard]

Sold my last lot today.  Its been a short but very profitable ride.  Only sold because I needed the money..  Still think share price will go higher with the buy back but could not wait. 

Fair enough. By the sounds of things, like me, you bought in before the consolidation so despite everything - board c*ck-ups included - it's been a very profitable ride, with maybe a bit more to come yet. The buyback will put a lot of upward pressure on the SP so I'm holding on a bit longer....