Can Sky sur­vive with­out sport?

SEAN MCCREADY CO-FOUNDER & OWNER MBM

New Zealand Marketing - - Shorts -

Un­for­tu­nately the an­swer is prob­a­bly not. Live sport is Sky’s unique con­tent of­fer­ing. It’s the pro­gram­ming that can’t be eas­ily repli­cated or sub­sti­tuted.

In fact, the ques­tion re­ally is, can Sky sur­vive with­out rugby? The top 30 Sky pro­grammes in 2018 for the all im­por­tant 25-54 demo are mostly Su­per Rugby with a few cricket and War­riors games to make up the num­bers. So the cru­cial con­tract for Sky is the San­zaar rights that ex­pire in 202o and cov­ers Su­per Rugby and The Rugby Cham­pi­onship. This deal is much more im­por­tant than the Rugby World Cup rights.

Reg­u­lar, on­go­ing com­pe­ti­tions like Su­per Rugby and NRL are the back­bone of Sky’s of­fer­ing. Sky needs a strong Su­per Rugby com­pe­ti­tion which in re­cent years has lost some ap­peal with the ex­pan­sion to new teams (from Ar­gentina and Ja­pan). It is only held up by the New Zealand teams per­form­ing ex­cep­tion­ally (aside from the Blues) and great lo­cal der­bies. The Su­per Rugby for­mat is weird with a month-long break be­fore the semi-fi­nals when the All Blacks play a tour­ing side. And now there’s talk about South African sides po­ten­tially leav­ing Su­per Rugby to play in a Eu­ro­pean com­pe­ti­tion. Su­per Rugby has a few prob­lems.

So sport is less sub­sti­tutable than other con­tent. An All Blacks fan needs to see them live and won’t get the same buzz watch­ing a dif­fer­ent sport in­stead. How­ever, a per­son that likes HBO drama West­world could prob­a­bly live with­out it and watch a plethora of other great dra­mas or find a way to watch it il­le­gally. Non-live sports con­tent is just not as sticky, and with­out a mo­nop­oly on key sports, Sky ends up com­pet­ing on gen­eral pro­gram­ming where Net­flix and Ama­zon of­fer con­sumers amaz­ing value.

Sky prof­its re­main strong and they are ef­fec­tively the only lo­cal broad­caster mak­ing sig­nif­i­cant money out of TV. How­ever, the lat­est results were on the back of cost con­trol rather than sub­scriber rev­enue growth, and the trend is more peo­ple mov­ing to on­line sub­scrip­tion ser­vices, pri­mar­ily Net­flix. There’s tough times ahead and sports rights re­main the profit en­gine for now.

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