Another media merger

A major shake up of media and communications in New Zealand builds as Sky TV and Vodaphone announce plans to merge. This follows proposals to merge NZME and Fairfax.

Fran O’Sullivan writes: Media marriages leave rest looking for partners

Yesterday, Sky TV and Vodafone painted their merger proposal as a “strategic partnership of equals”.

The concept was remarkably similar to that used by NZME and Fairfax when they unveiled their plan last month.

Except the commercial bogeymen differ: Google and Facebook are the disruptors changing the game for the publishers. When it comes to NZ’s pay TV operator (and its telco partner) Netflix is a key threat.

She says it won’t be business as usual in a rapidly evolving media market.

Yesterday, it was “business as usual” at Spark NZ as it pushed the line that the Vodafone/Sky TV move simply formalised and deepened that existing partnership.

It won’t be BAU – the rapid changing media and telco environment makes that concept an absurdity and convergence a reality. What is clear is the two proposed media marriages lessen the merger options for remaining players.

Clearly, MediaWorks’ is in play. But it would be naive to think that the chess board has not also changed for TVNZ and RNZ.

MediaWorks has had ongoing problems. Options are limited for TVNZ and RNZ as they are state owned.

New Zealand media companies are finding the competition tough, with strong competition for paid content and advertising from international companies.

If allowed to merge it will be a major change for both Sky and Vodaphone. Sky in particular will have to change what they offer and how they offer it significantly to stem a loss of customers.

I dumped my Sky subscription a year ago, sick of paying so much when I didn’t want most of the content they insisted I have in order to get what I wanted.

Later in the year they offered a special half price deal for 12 months, which I took up.

This reminded me that the majority of Sky channels were of little or no interest to me. I don’t want to pay for things I don’t want. So if Sky try to get me to continue on an exorbitant subscription for that I’ll opt out again.

There are now many options for broadcast and streamed entertainment and news. I’m not going to commit to a bunch of ongoing subscriptions. I want to pick what I want – I’m happy to pay for that.

Sky has chosen to restructure their business model. They will also have to restructure their marketing model if they want to stem the losses of their share of the market.

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8 Comments

  1. David

     /  10th June 2016

    the retirement of Fellet is a must, his approach is tie up as much content as possible so no one else can get it then have as few channels as he can possibly get away with so his audience is just large enough to sell to advertisers. its a crap model for the consumer which is why Sky is so hated, most sattelite platforms have 500plus channels.

    Reply
  2. Corky

     /  10th June 2016

    Two losers trying to become winners- will it work? I stay with Spark. They are slower to offer what smaller providers offer but I always seem to get a better deal. Many in my area switched to a provider offering cheap broadband. But that was it. I get capped price on national/ international calls and lots of free stuff. I even get a delightful Indian lady ring me every 6 months to go over my plan and offer advice on how I can make savings. Some times bigger is better.

    Talking on changing trends, our area lost another Video Store. It wasn’t that long ago they were King.

    Reply
    • Blazer

       /  10th June 2016

      theres more to life than watching T.V and stuffing raspberry buns down your neck…Corks.

      Reply
      • Corky

         /  10th June 2016

        Most unkind, Blazer. Watching TV..eh? If you believe everything you read….

        Reply
  3. Dougal

     /  10th June 2016

    TVNZ and Sky have been working together for a couple of years now. They offer IGLOO which is all the freeview channels plus 13 sky channels (for me Discovery, NatGeo, and BBC are all I am interested in on Sky) they also have major sporting events as pay-per-view. This is only $20 per month pre pay so no need for any contracts and you only pay when you want to watch. I would never have Sky after being treated very poorly and gouged as a customer for many years. This tie-up with Vodafone may also see me going to Spark regardless of any price incentive. I just refuse to do business directly with Sky anymore.

    It’s also interesting to note that Vodafone have been investing less in service coverage by way of almost forcing customers with poor cell service to obtain Vodafone broadband thus allowing the connection of a small box (Vodafone Sure) to the broadband connection to improve service. I live in a highly populated suburb of Auckland but we are in a dip along with several hundred other people and Vodafone are not interested in supplying another cell site. Their only solution is that I will need to have Vodafone broadband if I want to see in improvement is cell service.

    Spark on the other hand allow customers to purchase a signal booster and you are not tied to them for broadband. Vodafone are almost making the choice for me. Now that Sky will own them I’ll be taking my business elsewhere.

    Reply
    • Just a minor point Vodafone Group PLC will own Sky TV NZ… the deal gives Vodafone Group PLC 51% of the share capital of the merged entity plus over a billion in cash.

      It will be interesting to see how it pans out but I won’t have Sky TV again – its a rip, and Voda’s customer service is terrible…

      Reply
      • Dougal

         /  10th June 2016

        It’s a moot point but in fact Sky are buying Vodafone for 3.44B in cash and shares. The newly formed entity will mean Vodafone has a controlling interest at 51%.

        Reply
      • Gezza

         /  10th June 2016

        Reply

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