Originally Posted by
mistaTea
Yes that is true...but also consider that the 'savings' they made on cricket, F1 have been spent on the higher cost of NZR etc.
If they just purchased all of the rights from Spark (even at a discount) there would have to be some thinking around whether the entire additional cost could be absorbed into the current pricing model or not.
If Spark do end up getting out of Pay TV I don't think it will be any time soon. One would think that Jolie has paused for thought after the Vodafone update - she has certainly seemed a lot less bullish on Pay TV than her predecessor Simon.
But shutting down Spark Sport would be very embarassing for them, and it is not nearly as easy for them to extract themselves like Vodafone have. Vodafone never had to deal with complex and expensive content rights. All they have to do is cancel their agreement with Sky (which will be super easy because Sky would rather have the VTV Sky subs direct, so no challenge there).
On the other hand, I would say that things are even worse for Spark than Vodafone in terms of ROI. VTV offered a streaming only platform where you could have 'amost' everything in one place...and if you had Vodafone broadband you would get discounts on your Sky sub etc...and it was a disaster.
Spark Sport has cost way more money than VTV, and does not appear to have anywhere near the subs needed to get anywhere near break even. Broadband/Mobile market share does not seem to have changed much either, so I don't think Spark Sport has been a compelling loss leader. At the end of the day, you only save $5/month on Spark Sport if you shift your internet to them - big whoop.
If Spark do stick it out, hoping they get an opportunity to take over the rugby rights from 2026...well, that is a long wait - and I also wonder if there are some potential issues here.
Think back to RWC...Spark had promised the other telcos that they would offer them wholesale rates. They stalled and delayed, and then just before the tournament they launched their pricing offer for the other telcos. It was far from what you would consider 'wholesale' and the other telcos were rightly aggrieved. They had spent a chunk of cash upgrading their networks to support the streaming of the RWC and then got a slap in the face by Spark.
Well, let's just say Spark stuck it out and then did win the rugby...I wonder if there are potential competition issues here. The NZR contract could be considered content of national significance. If Spark used that to offer heavy discounts and undercut the other telcos, gain disproportionate market share etc I think there is an argument for the Comcom to get involved. To avoid this, they would have to offer genuine wholesale deals to all of the other telcos (and Sky is now considered a telco, given we have to pay the infrastructure levy now).
But if they are forced to offer Spark Sport at a little over cost to their competitors then I think it raises more questions as to whether it is even worth their while to pay $100M a year to secure the rights and incur the aditional costs around broadcasting.
Let's watch this space.