Daily ShareChat: Sky Network Television

By Jenny Ruth

Wednesday 17th November 2010

Sky Network Television will unveil its iSKY internet-based service on November 24 and, assuming 'over-the-top,' or TV over broadband, becomes a reality in New Zealand, "we believe the opportunities for Sky outweigh the threats," says Sarndra Urlich, an analyst at First NZ Capital.

"It is unlikely that a stand-alone video streaming model would work in New Zealand, given the lack of economies," Urlich says.

"The reality is that New Zealand is largely irrelevant from a global standpoint and would hardly be top-of-mind for Google or Apple TV," she says.

Unless competitors have premium content, they pose no competitive threat, regardless of the distribution platform, Urlich says.

Sky will be able to use iSKY as a customer retention tool and as an incremental revenue generation tool.

"In reality, it is hard to know the extent to which VOD (video on demand) will take off as far as consumers are concerned but it certainly gives Sky a compelling offer when compared to the competition," she says.

"From a sentiment perspective, we expect Sky's share price to be well supported by the ever-nearing Rugby World Cup and what we believe will be a 'glitzy' premiere of iSKY. It is our view that investors will be willing to forgive what we see as short-term subscriber growth weakness."

Rating: Neutral.

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