Originally Posted by
mistaTea
Good questions.
1. It’s a long story, and in 2023 I suspect they have missed the boat on this. Even if their new STB worked well it was unlikely to be a massive drawcard for new subs as customers have moved on (most just stream using apps, those non-sky customers who want a STB use devices from tech powerhouses like Apple).
Some backstory, around the time of the sky-Voda merger … sky was working on a new STB. It was the Cisco infinite video platform. This was just as NETFLIX was making major inroads, but there weren’t really any other big streamers at that time.
The idea was to secure sky’s position as the ‘aggregator of choice’ by providing a modern UI that pulled together sky content with 3rd party apps like nettlix and any other new ones that came online. Couple this with sky diversifying revenue by becoming a telco (merging with Voda) and hey presto! Future secured.
So the vodafone deal was rejected and John Fellet (long standing CEO at the time) resigned. They hired a new guy - Martin Stewart.
Martin wanted to shake things up, and one of the first things he did was cancel the infinite video project (this cost shareholders about $40M of sunk costs btw - so a very big call). His argument was that MYSKY costumers were ‘well served’ (well, the majority of them are old and unlikely to cancel anyway) and that he wanted to focus on building our world class streaming services. I certainly agreed with the need for big upgrades to NEON and FANPASS (predecessor to sky sport now).
FANPASS was a dog that only allowed you to stream sky sport 1-4 and there was no on demand content (or very little from memory). So even though SSN is still a bit sh1te as a platform compared to Spark sport - it is leagues ahead of what was there before. They seem to have stopped innovating in this space and I agree that it is not great that it is linear based.
For NEON, Martin purchased Spark’s LIGHTBOX and rebranded it to NEON. Once again, sparks tech way better than sky’s so this was a big improvement.
However, like SSN the innovating for NEON seems to have stopped.
In the meantime, somewhere along the line about 18 months or so after canning the Cisco project someone at sky decided they did need a new STB after all! So let’s begin a brand new project from scratch!
And let’s make the new box a hybrid satellite/IP product so that any box we buy will require customisation (i.e be expensive) even though this new box is unlikely to drive any growth!
Anyway, I could go on about more background etc - but in terms of your question … do they need a new STB? There is an argument that they should. If they could land the right product that aggregated content from third party providers with their own content in a user friendly UI then they could maintain some relevance long term. But to do that they should just have an IP box - and one that works!
With the innovations coming from Apple TV and others though I suspect sky are just way too late now. Entering the party so late, and with a box that doesn’t work is just terrible.
2. Sky don’t control anything - they just rent content. The business mode relies on the ‘power of the bundle’. Outdated now, but if sky got out of everything else except sport … they would have to charge a lot more for their sports bundle than they do now because they don’t have any other ‘hooks’ to get subs to pay for more (and therefore cross subsidise the sport offering).
Sport is a significant part of their customer base, but the majority of their subscribers have some form of entertainment service or bundle - so that would be a big call (and the wrong call imo).