Sky subscriptions in drawn-out dive
Sky Television can expect to lose about 12,000 satellite television customers each year for the next five years, Australian analyst Morningstar has forecast.
The broker predicted in a research report that the pay TV company would see its traditional customer base decline by 2 per cent annually until 2022.
Revenue losses could to some extent be offset by growth in Sky’s internet TV services Neon and FanPass, but profit margins would fall.
Subscriber losses of the order forecast by Morningstar would represent a significant improvement on the haemorrhage of almost 34,000 satellite subscribers in the year to June.
Sky surprised some onlookers by removing weekly and monthly options to its online FanPass sports service in May.
But Morningstar said it was imperative that Sky played in the internet space given the challenges to its traditional business.
‘‘Only by keeping a firm hold of its subscribers can Sky maintain its intrinsic value and perhaps appeal to a potential acquirer, whether it be a telecom player or a consolidator.’’
Competitive pressure on Sky TV is expected to increase as US retail giant Amazon edges closer to entering the New Zealand market.
Speculation was intensifying that Amazon was interested in New Zealand rugby broadcasting rights, Morningstar said.
‘‘The five-year rugby rights to Sky expire in 2021 and the process for the rights from 2022 will begin in April 2018 – an early start we believe has been designed to provide Amazon plenty of lead-time to prepare the infrastructure if it wins.’’