Sky to focus on apps as Fellet steps down
Sky Television will design new video ondemand platforms and keep fighting for rights to exclusive content after its boss John Fellet retires within the next year.
Commentators said Sky needed a new direction after Fellet announced he would step down after 27 years with the pay television operator.
Yesterday, ahead of a planned investor briefing, Fellet said he would stay until a new appointment was made to ensure ‘‘a strategic succession process’’.
In an announcement released ahead of the briefing, Sky chief financial officer Jason Hollingworth said the company had invested in redesigning apps and ondemand platforms that would eventually take over its satellite television offerings.
The new video on-demand platforms would give customers more tailored recommendations based on their viewing history and would make watching on the go easier, he said. It would renew its satellite contract this year.
Former Telecommunications Users Association of New Zealand boss Paul Brislen said Sky should aggressively push all its existing customers off satellite and onto a digital platform ‘‘because that is the future’’.
The company had been ‘‘floundering for a long time’’, he said.
Fellet understood the need to move towards a ‘‘digital first’’ business model, but that had not happened under the board’s watch, Brislen said.
However, few New Zealand executives had the ‘‘digital chops’’ to take Fellet’s seat and revamp Sky, he said.
Brislen said a new boss would need to ‘‘hit the ground running’’ as Sky made important decisions this year, including a bidding war against Spark and Television New Zealand for broadcast rights to Rugby World Cup footage.
Sky’s announcement said it would continue to focus on rights to exclusive sports content and blockbuster movies.
Sky spokeswoman Melodie Robinson said Fellet would continue with the company as a board member.
Hamilton Hindin Greene investment adviser Grant Davies said Sky needed a boss with experience in the ‘‘online world’’, given new technology had caught Sky ‘‘probably more off guard than what it should have’’.
Sky has been struggling to win new customers against an increasing tide of streaming and on-demand services, particularly Netflix and Spark’s Lightbox.
Last year its attempt to merge with Vodafone was canned by the Commerce Commission, although Sky continues to have a partnership with the telco.
Last month the pay TV service decided to restructure its pricing system, making it cheaper to get some channels.
When asked if Fellet’s resignation was too little too late, Davies said the company’s dropping share price supported that argument. Sky’s share price has been sliding since mid-2014. In the past year its share price has dropped about
$1.60, to close at $2.27 yesterday.
The company also reported a 5 per cent drop in revenue for the six months to December, to $433 million, although its interim net profit rose 12 per cent to
$67m, thanks to a drop in operating costs. Davies said Fellet’s decision to remain with Sky as a board member would be useful, but he needed to strike the ‘‘right balance’’ between sharing his experience and allowing a new boss make decisions.
Sky chairman Peter Macourt said the company would begin a global search for a replacement CEO, including New Zealand-based and internal candidates.
Macourt said the board was grateful for Fellet’s contribution, saying: ‘‘John has been the driving force behind Sky’s success for many years.’’