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Brislen on Tech

Paul Brislen, Editor. 09 March 2018, 5:00 pm

Sky is the limit

On the surface of it, Sky TV deciding to lower its prices somewhat really isn't an issue that IT professionals should care about. Except oddly enough it is.

Because Sky is holder of a huge amount of New Zealand content (in particular sporting content) and is holding out for a 5G network build before it does anything useful with its content and frankly the whole thing is a great case study of How Not To Respond To Disruption.

Sky has lost a huge number of customers in the first half of the year. Despite profit being up by 12%, around 37,000 customers fled the cable TV provider forcing Sky shareholders to wail and gnash their teeth.

The reason? Netflix, Lightbox, Amazon Prime and all the rest of this new era. Oh and of course the mainstream media (like TVNZ and NZME) "illegally" using clips of Sky's sport during news broadcasts. Yeah.

The real reason is Sky has seen the future and doesn't want a bar of it. For whatever reason, Sky has not embraced the digital age and can't seem to fathom why customers would want to buy products on a "video on demand" model. Yet want it they do - Netflix is now estimated to have around a million customers in New Zealand and when you consider there are only around 1.7 million households, that's a pretty good bite out of the market.

Yet Sky TV knows this and saw it coming and had a plan. I'm surprised it hasn't actually followed through on any of it.

Many years ago, John Fellet told me he wanted to see Sky become "the Amazon of New Zealand video content". By that he was comparing buying video content with buying books. Book buyers don't look at the various publishing houses for the books they're publishing - they go to retailer Amazon and buy them there regardless of the publisher. His vision for Sky was to fulfil that role for video content for New Zealand. And, given the lead Sky had over the rest of the market at that time (about six years ago) that shouldn't have been a problem. TVNZ and TV3 as they were couldn't do it and Netflix was yet to launch.

Today, that ship has sailed, and Sky has stood by waving its hanky at the retreating shape of its market.

Sky has great content. It has high-demand US drama, documentaries, must-watch news channels (and Fox) and it has the New Zealand sporting scene sewn up. But for reasons known to nobody it has a lousy digital platform that constantly breaks and apparently it has no digital-first strategy.

As for waiting for 5G to come along, oh please. New Zealand has world class fibre to the home. We have this thing called "wifi" and we have 4G services that are fast enough to stream content to smaller devices like phones and tablets. If Sky continues to wait for the time to be juuuust right, it will end up having to switch out the lights entirely.

Sky needs to spend the money, to bite the bullet, and to build for the future. Instead, it has rearranged its entry level pricing and said nothing at all about how it will migrate from satellite to UFB.

Once the Rugby Union wakes up and realizes the value it holds in its own content and that Sky's outside broadcast unit and all of the editors and directors and camera crews and commentators are all contractors, I suspect they'll say "thanks but we'll take it from here" and then Sky will really start to feel the burn, but by then it will be too late. Already in the past year Sky's shares have fallen by a third - the next stop will see a new board and management team trying to rebuild a once mighty company. 

Sky TV - Half yearly report

TVOne - Sky TV's subscriptions now cheaper as company splits Basic package in two

NZ Herald - Sky shares plummet 9 per cent despite half-year profit rise

NBR - Sky TV boss asked for his big ideas




E-asy does it

Speaking of massive disruption and embracing the future, did you know BP is rolling out electric charging areas at its UK petrol stations?

This is a pretty big move for the oil company (motto: I'd like my life back) because it's the beginning of the end of big oil as we know it.

BP has mused over what the world would look like if combustion engines were outlawed in 2040 and the answer is: pretty good actually. Because the alternative is massive increase in emissions and increased congestion on our roads.

But it's not just electric vehicles that BP threw into the mix. What about autonomous vehicles? Could a ban on petrol-power ignite the rise of the autonomous car?

Absolutely it would and on that front, you could say it's already upon us.

From April 2, California will allow driverless cars on the public highways around the state.

That's a bold move, given where the technology is currently at but it means real-world testing for the IT systems behind these cars and it means California will be the home of autonomous cars for the foreseeable future.

If only someone here had thought to say "Hey, we can provide both green electricity AND real world testing AND we'll give you a tax break if you set up your testing labs and manufacturing facilities in New Zealand," but alas, we are without such visions.

The Register - Super Cali's futuristic robo-cars in focus. Even though a watchdog says tech is quite atrocious (headline of the year for sure)

Renew Economy - Death spiral for cars. By 2030, you probably won't own one

Peak Oil - What if every car sold in the world was an electric vehicle?


Ultra Fast

One thing we did get right was the building of the Ultra Fast Broadband network. Sure, there were teething issues (cough cough Chorus putting its hand out for $600 million more) but once we put that nonsense to bed (read the EY report linked below to see that yes, the company was in a hole but no, it didn't need a government bail out) but now customers are starting to see the benefit of it (eg: they can ditch the Sky TV decoder and watch what they want when they want it in 4K glory on the big screen TV in the lounge) and we look at the debacle that is the Australian NBN project (motto: GIMMEGIMMEGIMME) we can smile a contented smile and sit back happy in our lot.

More than half a million users are connected to UFB. There's still a lot who aren't but that number is being carved out as we speak. On top of that, the fixed wireless offerings from Spark and the rural wireless ISPs are taking a fair share of internet access out to the masses and both Vodafone and 2degrees can also chip in with their own 4G stories to demonstrate just how much network speed we've got going on in New Zealand (Editor's disclosure: I'm currently doing some communications work for 2degrees).

I saw a post from Australia advertising blisteringly fast speeds on the NBN - 42 Mbit/s a second "typical evening speed" for only A$69 a month.

Wooh, I thought, as I gently caressed the 1Gbit/s down 500Mbit/s up connection I get from Orcon for around NZ$100 a month.

We have a golden opportunity here to really disrupt our own economic reality. Forget cows and protein powder, let's use the infrastructure we have to change the world. If there's a theme to this week's newsletter, and it would appear there is, it's that disruption is coming and we are ready so let's take advantage of the moment for a change.

CIO - Ultra-Fast Broadband access ahead of plan: Clare Curran

EY - Independent assessment of Chorus' financial position (2013)

ODT - Chorus six-month profit $329m

TPG - 42Mbit/s typical evening speed


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