John Drinnan: Lightbox staying, says Spark

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Still from TV show Vikings which appears on Lightbox.
Still from TV show Vikings which appears on Lightbox.

Spark is standing by its subscription video on demand service, Lightbox, amid speculation that it has also signed a deal with Netflix.

An industry source suggests the two services might run in tandem, with Netflix offered as part of a Spark package, and Lightbox given free to customers.

Spark spokesman Richard Llewellyn says the company does not comment on market speculation or rumours.

"We are absolutely committed to Lightbox and customer numbers are growing well," he says. "It's an important part of our media offering and our investment will be increasing, not decreasing."

This is a pivotal point in pay TV, with Vodafone waiting for the Commerce Commission to decide on its planned merger with Sky TV.

Llewellyn says there is no prospect that Netflix will replace Lightbox, noting an increase in the number of subscribers. However, it is not clear how much of this is due to Spark extending its offer of free Lightbox for broadband customers.

Spark will release its half year results on February 16.

By press time, Netflix had not offered any comment.

Sky vs Winston

Since it began in 1989, Sky TV has put a lot of effort into fighting and winning political battles so it can stay unregulated.

This year, however, it will have Winston Peters on its back.

A member's bill from NZ First's Clayton Mitchell calls for sports events of national significance to be set aside for free to air TV channels. This is often known as "anti-siphoning" legislation.

At the heart of Sky's success is its dominance of sports, which it uses to persuade fans to buy a basic Sky package.

So Sky cannot afford to let the bill gain headway in an election year, challenging that long-established dominance.

The bill is expected to go to its first reading in the next two months. Few observers expect it to result in free to air winning preferential rights to major sports events. But debate on the topic - and the fact that New Zealanders often have to pay to watch the All Blacks play - might provide bad publicity for Sky and good publicity for NZ First.

The Greens have supported the first reading of the bill, while Labour has not declared its position.

Two nationally significant sporting events will be on Sky during the time the bill could be in the news.

The America's Cup runs from May 26 to June 27 and the Lions rugby tour from June 3 to July 8.

New Zealand Rugby is likely to be a key supporter for Sky in the event that there is public demand for NZ First's anti-siphoning rules.

So are the other premium sports codes: cricket, league and netball.

New Zealand Rugby would argue that they need the revenue from pay TV to survive, and anti-siphoning rules would not work. The organisation's chairman, Brent Impey, says he will gladly testify to such rules not working.

Impey, a former chief executive of TV3 owner MediaWorks, says the All Blacks could not afford to retain talent if pay TV revenue were diminished.

He says comparisons with other countries which have anti-siphoning laws are not valid, because of New Zealand's small size.

Uphill push

TVNZ chief executive Kevin Kenrick says the push for anti-siphoning rules will be an uphill task.

He insists that anti-siphoning moves need not hit sports bodies, because they could still enjoy the revenue from other media such as streaming.

"The future for small countries is multiple monetisation streams of content," says Kenrick. "In this country, rugby has the ability to go direct with over the top streaming and to sell the rights for pay TV and free to air.

"I would be surprised if they could not generate healthy returns from exploiting these fully.

"If it were live, there would be increased value to a free to air player," says Kenrick, who notes that high participation and viewing levels make sport commercially viable for free to air TV.

So how come the sporting codes don't agree?

Kenrick says that comes down to the codes being "comfortable" after years of dealing with Sky TV.

Saving sport

Over the years, Sky has made assiduous efforts to convince MPs that any anti-siphoning rules would be a very bad idea, and damage sport.

Arguably, the most effective lobbying has been Sky's sponsorship of the parliamentary rugby team.

Sky TV chief executive John Fellet says the anti-siphoning argument resurfaces every two or three years.

Fellet questions whether free to air TV would play sports events even if Sky was shut out.

TVNZ says it attempted to get rights to the America's Cup in Bermuda, but was outbid by Sky.

Big events often require a free to air broadcaster, and in that case Sky uses Prime TV to provide delayed cover.

Free to air's problems go back to 2006, when the Commerce Commission allowed Sky to buy Prime TV.

That purchase allowed Sky to take up free to air rights and use them to offer delayed coverage, keeping the rights out of reach of the rest of the market.

- NZ Herald

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John Drinnan has been a business journalist for twenty years, he has been editor of the specialist film and television title "Screen Finance" in London, focussing on the European TV and film industry. He has been writing about media in New Zealand since the deregulation of the television industry in the late 1980s.

Read more by John Drinnan

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