Sky TV losing viewers, profit

"The Trump family has taken over the Kardashians as New Zealand's favourite reality family to follow." Sky chief executive John Fellet

Sky Network Television has reported a drop in viewers as it waits to find out whether the country’s competition watchdog will approve its planned merger with Vodafone New Zealand.

The company said total subscriber numbers fell from 852,679 to 816,135 in the six months to December 31. The loss of 36,544 subscribers equates to about 6090 walking away in each of the last six months of 2016.

Its net profit fell 32 per cent to $59 million and revenues were down 3.7 per cent at $458m.

One small cheer for Sky was that the audience for its United States news channels, which include CNN and Fox News, more than doubled when compared with the previous year as Kiwis turned to the stations to get their fix of the US presidential election.

‘‘The Trump family has taken over the Kardashians as New Zealand’s favourite reality family to follow,’’ Sky chief executive John Fellet joked.

Sky’s result was released yesterday under the shadow of a ruling from the Commerce Commission, which will announce today whether it will allow Sky to merge with Vodafone NZ.

Spark managing director Simon Moutter had a dig at Sky on the eve of the results, tweeting for the second time that he had ditched Sky’s broadcast service.

Spark launched a rival internet television service, Lightbox, in 2014 and is opposing Sky’s proposed merger with Vodafone.

Moutter had tweeted in September that he had sent his Sky box back to Sky, not mentioning that he had kept one decoder, which he used to watch Sky Sports.

Most Sky Sports programming can be viewed without a decoder through Sky’s standalone Fanpass online service.

Fellet said Sky’s legal dispute with Fairfax NZ, NZME and Television New Zealand was likely to go to court during the third quarter of this year, but he still hoped for a negotiated agreement.

Sky is suing the three media firms over their use of clips from Sky Sports. Fairfax, NZME and TVNZ argue their use of clips to accompany sports reports has amounted to ‘‘fair use’’ that is allowed under the Copyright Act.

But the pay-tv firm has accused them of overstepping the mark and seeking to profit from its exclusive broadcasting rights.

Sky’s programming costs leapt, accounting for 39 per cent of revenues, up from 34 per cent in June. Advertising revenues, previously a bright spot for the company, fell from $42m to $35m.

Despite the overall fall in subscribers, the number of highvalue customers who subscribe to Sky Basic and Sky Sports was virtually unchanged over the sixmonth period at just over 304,000.

Sky shares were trading down 2.9 per cent in afternoon trading on the NZX at $4.34.