Aardvark Daily

Please visit the sponsor!

Sky is falling?

When it was announced that TVNZ had partnered with Coliseum Sport Media Management to wrest the rights for the English Premier League games from Sky TV, the market responded very strongly.

SkyTV's share price plunged by a huge 8% on the news and there's been no sign of a recovery.

It would appear that Sky's reign as the defacto monopoly provider of pay-TV services in this country has come to an end and shareholders are nervous about the future.

Indeed, they have good reason to be mulling their options because I don't see a rosy future for SkyTV.

For too long, the broadcaster has cobbled together channel packages that lack synergy and value.

To date, this has meant that people had to "take it or leave it" and the result was that Sky was able to squeeze its customers very hard, forcing them to pay for a lot of content they didn't want just to get the small amount they did.

Look for some significant changes in this policy in the coming months and years.

Sky is about to discover that now the door has been opened (albeit by only a tiny crack), other competitors will start appearing out of the woodwork.

Netflix is bound to arrive here soon and when it does, the money that Sky prints by way of its crappy movie channels will all but dry up.

If I was a SkyTV shareholder, I'd be selling down at least half my holding right now because I believe the company has "peaked" and is unlikely to see the the same prices that are now (even after the tumble) in effect.

Sure the UFB rollout has had an incredibly low uptake -- but that's mainly because most people are finding copper-based broadband to be more than enough for their present needs. Why pay more for speed you don't need in order to update your Bookface page or read your GMail?

But just wait until the SkyTV competitors start streaming really interesting and appealing content in HD over UFB. Suddenly we'll see a boom in the uptake because then people will have a reason for demanding the extra bandwidth.

What's more, as the number who are hooked up to the UFB grows, so the market for IP-based media services grows and thus, more content providers will step in to fill that demand.

We stand on the brink of a huge change in the transport layer used by our entertainment media. Bookmark this page and come back in 12 month's time. I think you'll find I was right on the money.

Take that money you've realised from the sale of half your SkyTV shares and look for some promising IP-based content provider to invest in. You'll be glad you did.

Please visit the sponsor!

Have your say on this...

PERMALINK to this column

Oh, and don't forget today's sci/tech news headlines

Rank This Aardvark Page

Change Font