Sky ends year with $27M loss

Monday 14th August 2000

Increased depreciation and costs incurred developing their digital satellite business has seen Sky Network Television post a $27 million loss for the year ended 30 June 2000.

However, with subscriber numbers up, the future looks rosy for New Zealand's only listed pay television company.

Sky broke the 375,000 subscriber mark to end the year with 377,000 subscribers - a gain of 31,000 for the year. Sky's digital subscriber base also showed strong growth with 162,000 subscribers by the years end, an increase of 109,000 subscribers.

Revenue for the year was a record high of $263 million. Because Sky purchases most of its programming from the United States, New Zealand's weak dollar was said to offset revenue growth.

The costs of acquiring international cricket also affected Sky's operating cashflow. "We always knew the cricket acquisition was going to have a short term impact on our cash flow growth," CEO Nate Smith said. Mr Smith also said that Sky was addressing the issue of the weak NZ dollar through programming purchases.

Sky is undertaking a number of new initiatives over the coming year which include the introduction of pay per view movies and events, the acquisition of the Kingz soccer team, entering the music business through a joint venture with AEL, and overhauling their website.

Mr Smith said that the upcoming projects "provide a hint of the power that comes from combining interactivity with broadcast television. It's like fusing atoms."

Interactive game shows and sporting events, home shopping, concert bookings and clothing purchases will become part of Sky's interactive future.

Today it was reported that Sky's subscribers would soon be able to read Emails on their televisions and the Sunday Star Times reported that Sky was also considering a shareholding in the Auckland Warriors.

After the announcement, Sky was up 3c to $4.20

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