Rugby is a major drawcard for Sky consumers, and Sky are reportedly not the preferred bidder for Rugby World Cup 2019 rights.
"We know that linear TV will die," said Sky TV head of strategy George MacFarlane during a presentation to media yesterday.
This statement carried an uncomfortable truth that broadcasters have skirted around in recent years, but MacFarlane presented it for what it is: a fact.
"Linear viewership is still enormous,but it's never going to be bigger than it was yesterday," he said.
"It's peaked and our job is to manage that transition. We're lucky because we've still got all these customers who watch linear content and they pay us handsomely for it. But we have a job to do in managing our client base toward a VOD [video-on-demand] world, where there might not be linear channels as you and I know them."
It's a job that Sky is taking seriously, with the company yesterday announcing a range of new initiatives designed to retain existing customers and attract those who have either jettisoned their subscriptions or never shown interest in obtaining one.
Over the next 12 months, Sky plans to launch an array of cheaper options designed specifically to appeal to younger users who have made the swiftest transition from linear television.
This includes the release of a new puck, similar to the Apple TV unit, that will give users access to Sky offerings such as FanPass and Neon.
Sky is yet to settle on the pricing model for the puck, but suggestions from the broadcaster yesterday were that it might involve selling the hardware at retail stores or offering it as part of a budget subscription deal, akin to the approach used for set-top boxes.
Users uninterested in having any hardware will also have a third option of accessing Sky content via an app on a mobile device or a tablet.
Sky has also suggested a drop in the price of Neon as well as the introduction of a lower priced mobile-only option.
This mobile-only option also comes with the promise of cheaper access to sports content.
"We're going to launch a sports-based product that's a lot cheaper than any product we've got in the market at the moment," MacFarlane said.
Asked whether he was concerned that customers might cast the content onto a bigger screen via tools such as Chromecast, MacFarlane said the service would be designed for mobile only.
"The Chromecast functionality will be switched off. And that's why we will do the lower price."
This service will build on the highlights app that Sky currently offers as part of its sport package.
While these initiatives are targeted at a younger audience that doesn't necessarily pay the bills for Sky, MacFarlane said it's essential to offer something for every member of the family.
"We want the family to get value, not just the person we identify as the heartland or the bill payer," he said.
"For every bill payer, there are often two or three other users in the home. One will be an adult but the other users are kids. That's what the highlight app is for as well as these new Sky Go products."
On the topic of the much-maligned SkyGo, the broadcaster has also updated this service by modernising the interface, adding 26 live channels, including entertainment content and offering catch-up content from more than 30 channels.
The appearance of the Sky interface accessed through the set-top box will also be updated, with the company doing away from the outdated menu for a digital structure more akin to that seen on the TVNZ app.
The current Sky interface was due an update. Photo / Sky TV
This move is well overdue. At a time when Sky's competitors have slick interfaces, featuring modern design and sharp imagery, Sky's current offering looks like a digital fossil, serving as an indication of what the world used to be like.
"There is a bit of catch-up to be done," conceded MacFarlane in admitting that the current aesthetics aren't exactly up to scratch. But he adds "winning doesn't just come from the tech" in that even the best interface in the world would fail if there wasn't anything to put in it.
Content, argues MacFarlane, is ultimately what determines success in this space.
Part of the reason why Sky suddenly sprang into action and playing tech catch-up is because the business has finally come to accept that its immediate future is as an independent company.
The failed merger essentially trapped Sky in a self-imposed limbo over the course of last year. It meant that Sky couldn't outlay a definitive strategy for the business, because it wasn't sure what the business would look like and what it would have to invest in.
It also meant Sky couldn't market or develop its brand story at a time when it was being lambasted across social and mainstream media for being a dinosaur lassoed to a legacy structure, which if it were tangible would resemble a set-top box and a satellite dish.
This is not to say that Sky is going to throw out the satellite dish and focus only on its digital offering. If anything, the satellite dish has become even more important following the failed merger.
"Satellite is something we can control," MacFarlane said. "We're not going to be a telco, and keeping satellite lets us stay in control regardless of that."
Sky's various issues aren't going to miraculously disappear overnight. But for the first time in a while, the company knows what it is and where it needs to go.
