Satellite television

Clare Curran looks set to commit Labour to an election year policy of bashing up Sky TV at the least or pushing to break up their alleged monopoly.

She has no concept of risk and reward in business…failing to recognise that the original investors in Sky TV put up considerable amounts of their own money to try something new in the NZ market. They have been successful with their business model and now people like Curran are moaning and demanding the ‘government’ destroy their property rights by breaking them up.

This is like David Farrar campaigning constantly against Telecom to break up their business. It is shameful for Farrar, and perhaps understandable for socialists like Curran, but it is arranging for the state destruction of private assets.

Labour’s broadcasting spokeswoman Clare Curran says Government regulation is needed to rectify New Zealanders’ lack of free-to-air television access to major sports.

Her party opposes Sky TV’s buy-up of major national sports over the past decade. “Sky have held at bay the prospect of regulation probably for decades, and very successfully. I have said for a couple of years now that that has to stop,” says Ms Curran.  Read more »

Regan from Throng has looked at (P)Igloo, the new joint venture from Sky TV and TVNZ and he has found that despite the marketing schlock the facts don’t match the reality.

He is also running a nice little competition for a Samsung Freeview PVR:

On Monday, Sky and TVNZ launched their hardly anticipated new subscription television service.

Here’s our list of reasons why it shouldn’t be under your tree this Christmas or anywhere else in your house for that matter.

 10. It’s probably still broken.  

The custom built platform was supposed to be launched months ago but has been delayed due to “technical problems”.  Is the launch simply exploitation of the spending season or a Christmas miracle?

9. TVNZ are involved.

Remember when TVNZ said “TiVo transforms television“? How are all those customers feeling today?  How long before Igloo too melts down?

8. A comparable Freeview box is less than half the price.

There are a number of basic models of DVB-T receivers which also have the ability to record to a connected USB storage device.

7. Sport is ultra-expensive.

The base “30 day channel pack” plus purchasing every Super XV match The Chiefs play during that period would cost you up to $99.74. On Sky this would cost $72.46 and include more channels, every Super XV game and a lot more sports besides.

6. Paying for content that used to be free.

Two of the eleven Igloo channels feature content that TVNZ used to broadcast for free:  Kidzone24 and TVNZ Heartland.

5. All Igloo content is Standard Definition.

The only content that you’ll be able to view in High Definition is from any of the free-to-air channels that broadcast in HD.  All of the extra content you’re paying for is delivered in standard definition.  This includes movies and sport.

4. High per channel price.

The “Sky Basic” package costs approximately $1.36 per premium channel compared with $2.27 per premium channel on Igloo.

3. Igloo is not a middle option.

Currently, a new 12 month “Sky Basic” package (~63 channels) with 3 months free sport and SoHo and free installation costs $553.44.
A new Igloo box (~34 channels) which you install yourself and a 12 month subscription costs $478.05
A new Freeview box (~29 channels) which you install yourself costs from $99.

2. Two thirds of the channels you can already watch for free.

That’s right.  They’re already free.  And also the most watched.

1. You’re not an Eskimo.

They’re the only ones who should have an igloo.

Those are our top 10 reasons why you shouldn’t get igloo and now we want yours.  We’ve got a brand new Samsung MyFreeview HD digital TV recorder (BDE-8500) worth $649 to give away.

In addition, if anyone reposts this on their own blog, we’ll include any comments made there in the draw. Have at it.

ᔥ Liberty Scott

Many of the whingers crying over the spilt milk that is TVNZ7 are crying because “intelligent TV” has died…except it hasn’t as Liberty Scott explains:

Of course, intelligent TV is widely available and seen throughout NZ.  It’s called Sky.

Sky brought New Zealand 24-hour news in the form of CNN, and more recently multiple options ranging from the BBC, Sky News, France 24, Al Jazeera, Fox News, CCTV and the new channel for nutty conspiracy theorists who are anti-American – Russia Today.  New Zealanders have never had better access to news about Australia, the USA, UK, Europe, the Arab world, China and Russia.  It also brought multiple dedicated channels for documentaries and then classic movies, arthouse movies and well as the mass market entertainment channels it supplies.

Sky started by paying the government for its first network, a series of UHF frequencies, installed its own transmitters and bought content.  It spent the first seven or eight years losing money, and now gets into around half of New Zealand homes.  People who are prepared to pay for the content it provides, which is not just sport, not just movies, but far more content than state TV can ever provide.  Now we all know Sky succeeds because of sports coverage, but nobody would have predicted what it now brings, thanks to an open market, absence of foreign ownership restrictions and absence of local content quotas.

The liberal, mainly left are now eyeing up busting Sky’s chops. Have a look at Clare Curran’s tweets if you don’t believe me:

@publicaddress have pretty much said all of that before. Good to hear Maharey on this though. Things have moved on tho. Time to address Sky

— Clare Curran (@clarecurranmp) July 1, 2012

Liberty Scott continues:

A successful business, which has brought far more choice and intelligence to NZ television that any other broadcaster, is now in the firing line from one of those who asserted that she is against braindead TV.

I’d have more sympathy if those who wanted to Save TVNZ7 had raised money to set up their own TV channel – which of course you can in New Zealand, given that there are no legal barriers to entry and there is a surplus of digital TV frequencies available on Freeview.  It is a matter of money.

The problem is that the Save TVNZ7 people don’t want to put their money where their mouths are, they want to make everyonedo it.  So when the investors in Sky, have put their money in, have done so with no taxpayer subsidy at all, have been supported by around half of the adult population in subscriptions, you might wonder why they don’t like that very much.

David Beatson has at least formed a trust, we will see where that goes…my pick is nowhere because most of the people fighting to save TVNZ7 couldn’t even afford a jacket newer than 20 years old. They will simply want to pick the pockets of taxpayers more. Somehow a television channel with three shows a week featuring Martyn Bradbury just doesn’t do it for many people.

ᔥ NZ Herald

It is excellent to see Paul Brislen, CEO of TUANZ rip into the Commerce Commission for their investigation of Sky TV’s telco relationships – describing it as a waste of time. Brislen notes that Sky TV’s telco relationships – its contracts, according to Brislen were about ensuring it gets the SAME treatment as any potential competitor. As for the rule that says Sky shouldn’t use its market power to deter competition, what kind of bullshit rule is that? Says Brislen:

“Proving that a powerful business has done something that any other business wouldn’t do in its shoes is almost impossible and in this case Sky TV can argue that these kinds of exclusive deals are simply the standard in the broadcasting world.After all, the commission says there’s no lessening in competition evident should Sky and TVNZ create a joint venture, despite one being the largest pay TV operator in the land and the other being the largest free-to-air TV provider. So that’s that.”

If it’s a waste of time, it’s also certainly a waste of money – with the Commerce Commission’s actions destroying around $150 million of Sky TV’s value in one day in mid May. What expensive costs will the ComCom run up to come back and say “err, actually, we didn’t find anything wrong”.

Brislen outlines the problem – a clash between how the law views Telcos and Broadcasters

Unfortunately, we have a heavily regulated telecommunications sector trying to do business with an entirely unregulated broadcasting sector and that’s beginning to chaff.

Set up a new business selling content online and you are treated as part of the telco regime, but call yourself a broadcaster and use a slightly different technology to deliver the exact same content and the world’s your oyster.

We currently have under way the Commerce Commission investigation into Sky TV, the Telco Commissioner’s study of barriers to uptake of the new ultrafast broadband network (UFB), the review of the media laws in New Zealand with a view to not only sorting out those pesky bloggers but also cyber-bullying (a strange pair of bedfellows if ever there was), a newly minted Copyright Act and attendant tribunal that’s yet to see a single complaint filed, a review of said Copyright Act’s fee structure, a Patent Bill that’s waiting to be passed into law that may upset our trading partner the United States because of its declaration that software cannot be patented in New Zealand, and secret trade negotiations that may or may not give away our rights in terms of intellectual property.

He also touches on a issue that this blog has dealt with – stickybeaking by the Commerce Commission into things they aren’t or shouldn’t be considering – policy (which should be the government’s prerogative)

The Commerce Commission can’t lead this work – it’s a regulatory body, not a policy arm, but without this kind of review we’ll continue shining our torch on disparate parts of the beast without realising we’re staring at the elephant in the room.

It’s time for the National Government to step in and assert policy as its role, and to stop the Commerce Commission wading into issues wrecking investments and company value. The question is, who is going to take responsibility for ruining $150 million of Sky TV’s shareholder value?

The other, sadly, involved more unexpected action by the Commerce Commission, with the effect of destroying wealth belonging to NZ KiwiSavers, people with money in funds, and direct investors.

This was in regards to Sky TV entering into deals with Telstra, Vodafone and Telecom over whether this might impact on competition on pay TV. (this after they cleared Sky TV going into partnership with one of its competitors on the grounds it wasn’t a big deal).

SkyTV are partnering with the companies that give it more options with the distribution of its content in anticipation of the big fibre rollout. Unsurprisingly, SkyTV want to ensure they get exclusive rights with the broadband retailers they partner with. This has caused the Commerce Commission to wade in and sniff around.

It’s a nonsense concern, because thanks to the Government rolling out fibre (in concert with Chorus) it will be cheaper than ever before for a new entrant to come to NZ, and offer set top boxes that plug into fibre connections for entertainment. Who needs expensive broadcast equipment anymore? It would be cheap for a new entrant to offer a broadband/fibre based TV package to consumers. (Just don’t mention how the Commerce Commission is going to disincentivise broadband users by artificially forcing down old copper prices!)

Sky TV’s shares were down by over 7% yesterday, or around $150 million in shareholder value lost.

Add to that the $180m of value lost in Chorus after the Commerce Commission unexpectedly proposed dropping copper wire broadband pricing by a large amount (and also involving the subsidising of rural users by town users), and you now have over $330m that got wiped away in the last two weeks – all thanks to the unexpected actions by a Government organisation.

If the National Party professes to respect property rights, then it’s now high time for the government to step in and re-write the Commerce Commission’s frameworks and guidelines, so as Bryan Gaynor so rightly put in the other day, the interests of shareholders and investors in NZ companies are considered in the mix as well.