D-day looms for Sky TV

sky tv vodafone commerce commission


OPINION: The 'D' stands for digital disruption.

That's the phrase used by Sky CEO John Fellet in announcing a six-month profit slump for the pay TV network.

Subscriber numbers have dropped by 44,000 compared to the same time last year. 

Kiwis' love affair with rugby and other sports is no longer enough to prop up the pay TV channel.

So is it a case of evolve or die?

Like all traditional media businesses, Sky has been trying to do just that, bringing in more on-demand online services, like Fan Pass and Neon.

Window dressing compared to the much bigger play - the proposed merger with Vodafone.

The long awaited decision will be delivered by the Commerce Commission on Thursday at 8.30am. 

Sky needs this merger: Rugby rights are costly, Netflix is eating into its audience, the whole television model has changed and the once unstoppable profit-making pay TV network is watching as its profits and viewers diminish.

If successful, Vodafone Europe owns Sky. It can put all the premium sports rights together with its mobile and broadband networks and there you have it - a one-stop shop.

Will it dominate, will it be able to dictate prices, lessen competition? Opponents - like Spark and 2degrees insist the answer is yes.

The Commerce Commission, in an earlier letter of "unresolved issues", said it wasn't satisified the deal would not substantially reduce competition.

Sky and Vodafone have been fighting their corner, but have they done enough?

Watch out tomorrow if the Commerce Commission says 'no deal'.