Most of that would have been paid out as dividends to shareholders.
Printable View
Agree they need to be careful not to overpay for Sporting rights...though that is easier said than done. Clearly they have to retain certain 'key sports' if they want to retain their branding as the Home of Sport. And with competition in the market now with Spark Sport (and soon DAZN) the price they need to pay to retain will go up.
I disagree with the notion that buying Lightbox was a mistake.
Lightbox is popular, most people I have spoken to who have used it have had positive things to say. As a platform it is far better than NEON.
They also have some decent content on there.
Buying Lightbox and merging it with NEON should work out well for Sky I believe. It will give them a beefed up SVOD service which should be more attractive to consumers. Plus a wholesale agreement with Spark which gives them hundreds of thousands of potential customers.
I just hope the 'new' platform they release is significantly better than NEON from a usability perspective. The new service needs to be slick...if it has any of the issues that plague NEON right now it would not be well received by the market.
NETFLIX has not only set the bar in this area...NETFLIX are the bar. So Sky will need to pull their socks up in a big way if they want the new service to be popular. Sky have the best content...they are just let down by the platform.
It’s a legitimate criticism that Martin Stewart has made. He is now trying to make up for years of underinvestment.
Previous management kept paying huge dividends each year ($100M+) even after Netflix became a phenomenon back in 2014.
Sure would have been nice if management didn’t give almost all FCF as dividends and made some key investments earlier.
But I think they were afraid to go into streaming too quick a sit would cannibalise their satellite base. In the meantime they took a few more big paydays.
That turned out to be stupid imo. They refused to cannabilise themselves so others came in and started to eat them anyway.
Anyway, that’s all history now. This is why Martin has such a big task ahead of him. I am broadly supportive of the moves he has been making. He won’t get everything right, but I think his aim to transition to streaming is right.
Sky still need to keep to their core competency of being an excellent content aggregator. However they need to be able to offer cheaper and more convenient packages. And that requires streaming.
Even if you want a traditional Sky package - nobody wants to have to wait for a technician to come and do an install. Not when you can sign up to NETFLIX and start watching in 2 mins.
I wonder if COVID will cause much of a delay in terms of the new streaming services sky are going to release? I think in their last announcement they indicated they would release in April? At least the merger Lightbox-NEON service?
This is all investors need to know. Over the past 5 years Sky has made loads of cash. The question is, what will happen in the next 5 years.
The market is pricing the stock as if it is the next "BlockBuster Video" that will collapse. If that was the case, why hasn't it happened already? BlockBuster filed for bankruptcy in 2010.
The reason Sky is still around and always will be is because Satellite Television has good latency, reliability and high bandwidth (when transferring one way data to large audiences). Different technology has different benefits and draw backs. There's no perfect system. Streaming has downsides too.
There's also a certain social aspect of watching direct TV as opposed to streaming content on demand. People like to watch what other people are watching at the same time. People also like it when someone else (like SKY) decided what to show and what not to show. People like to switch on the TV and not have to think - especially older audiences.
Furthermore, broadband speeds aren't getting any faster in New Zealand, and we're already at unlimited data plans. We've reached the peak in terms of penetration of streaming. The numbers are showing that satellite subscription cancellations are slowing, and will likely in my opinion, reverse and start to grow again.
Here's a good example. My sister got Disney+ a few months ago. She said it's great, but sometimes their modem plays up and it disconnects. She also had to buy a new TV because of the App. It does work on the kids tablets but sometimes that can be difficult for them to navigate on the computer. Sometimes it logs out etc or the wifi drops out. Where as with Sky you just flick on Cartoon Network and it goes. The point is, she has both Disney+ and Sky because they're both good value.
It’s also damn convenient to have the Freeview channels on the same platform as the premium content.
So you have one place to build up your watch list of the cool BBC shows on TVNZ (for example) as well as premium content like HBO, Sport etc.
Satellite has many many advantages over streaming but right now their packages feel very expensive compared to OTT providers.
$40 a month from the get to to get starter + my Sky - before you have even added the packages you want.
So streaming will be a cheaper way for sky to broadcast (and therefore offer more competitive packages), but I agree that satellite ain’t going anywhere anytime soon.
Hmmm. Will 5g disrupt satellite TV?
I used to be super bearish on Sky.
I knew when Rupert Murdoch sold his holdings back in 2013 that it was a good move. So many stupid retail investors bought into that placement and now they've lost almost everything.
I tried to get my Dad to quit Sky so I bought him an Android TV box. He used it for a bit but somehow that ended up collecting dust and he still has Sky. Most of my extended family and a lot of my friends still have Sky. Some have canceled but surprisingly not that many have cancelled.
It's amazing how the public hate this company so much but yet it still has a massive amount of paying customers and a monopoly.
What's more, is that the entire country is in lock down and almost all businesses have closed and have no revenue. Yet, people are still happily paying for Sky. It's like toilet paper! You just can't live without it. They know if they stop paying the Sky bill it will turn off. Then what will they do?
Seriously, people love to watch crap on TV, over and over again and pay for it. It's a great business. It's just comes down to price. I wouldn't pay $2 per share for Sky, but "Mr Market" is offering 27 cents for this company. Just lol, yes please I'll buy.
hmmm Linear TV may move into production rather than distribution, networks doing TV will probably be more producers of content and change to use Netflix as a distribution hub as long as it's exclusive. We're probably five years away from something like that.
Here's one "stupid investor" who received his SKY shares in exchange for shares in INL - Independent Newspapers Ltd., publishers of the Dominion and the Evening Post. Only held them for a few years and sold at a handsome profit! Never did understand the technological issues sufficiently.Quote:
I knew when Rupert Murdoch sold his holdings back in 2013 that it was a good move. So many stupid retail investors bought into that placement and now they've lost almost everything.
:cool:
Maybe its the declining cash flows that have punters worried
Last year or so under investment and declining dividends has help boost FCF … maybe the $90m and $55m forecasts aren't sustainable?