COMMENT:

Ex-BSkyB bean counter and UK Football Association CFO Martin Stewart has been named the new chief executive of Sky TV.

Here are his five biggest headaches when he takes the big chair from February 21:

1. Spark

Simon Moutter wants to be Rupert Murdoch. The Spark MD has so far overseen a drive that has seen the telco buy rights to the Rugby World Cup 2019, Formula 1, English Premier League football and New Zealand hockey for Spark Sport, launching in the New Year. And a new partnership with outside broadcasting company NEP strongly hints that the Moutter also has ambitions to cover local All Blacks and Super Rugby games, with partner TVNZ possibly roped in to cover gaps in ultrafast broadband.

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2. Piracy

The rise of "Kodi" boxes and illicit streaming to social media sites has seen the piracy problem - previously confined to movies and TV series - spread to sports. Sky has launched two cases against sellers of Kodi boxes and, with cooperation from Facebook, a dozen successful cases against people who have illegally uploaded video to social media (albeit only seeking token costs, not damages). Sky's new CEO has to decide whether to make an example out of a casual pirate by, say, choosing a random Kodi box buyer then going after them for thousands to scare off others (though also risk a PR backlash).

He will also have to decide how hard to push in a bid to make ISPs block online services that offer pirated content - a move opposed by Spark and 2degrees and a number of other internet providers who say it's not their job to police the internet and an apparent 300,000 regular sports pirates.

3. Wooing the online crowd

Fellet admitted his children do most of their viewing online. So do an increasing number of parents these days. Appointment viewing is out. On-demand is in. Sky will make some progress here when it releases an Apple TV-style, Android-powered unit that only works over broadband, and features Netflix (and perhaps Lightbox) apps, as soon as February. An app-only Sky TV service, independent of any hardware is also in the works - although on an uncertain timeline.

UK import Martin Stewart will take the reins at Sky from February 21. Photo / Supplied.
UK import Martin Stewart will take the reins at Sky from February 21. Photo / Supplied.

Sky actually has a good pipeline of on-demand products to complement its current Fanpass, Neon and Sky Ondemand. It's just about five years too late, including the lost weekend where product development was frozen for two years as merger talks with presumed new technology provider Vodafone took place. Stewart needs to play catch up. Fast.

A good first step would be to beef up the existing Fanpass, Neon and Sky On-demand, none of which are as full-blooded as they could be due to Sky's fear of cannibalising its traditional decoder business. Stewart needs to move beyond such short-term thinking.

But there's a tricky balancing act here. Adding apps will look a bare-minimum concession to modernity of the Netflix crowd, but intimidating or confusing to a lot of Sky's traditional audience. Different products for different types of subscribers will help, but it's also going to get expensive and complicated to administer.

4. Being his own man

Long-time Sky chief executive John Fellet will stay on as a director. The NZ Shareholders Association says it opposes any departing boss joining or keeping a seat on their company's board on the basis that "the ex-CEO will carry too much influence and may inhibit necessary change being made – particularly if it casts his or her tenure in a poor light and seeks to change or reverse earlier strategies and policies."

Sky needs a circuit-breaker. But between Fellet perching on his shoulder and his closeness to director Mike Darcey (also a BSkyB alumnus), Stewart looks dangerously close to an insider appointment at this stage - despite jetting in from the UK.

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Sky TV's shares have tumbled from $6.92 to Friday's close of $2.30 amid new competiton from streaming services for viewers and sports rights, a rise in piracy and the blocked Vodafone merger.
Sky TV's shares have tumbled from $6.92 to Friday's close of $2.30 amid new competiton from streaming services for viewers and sports rights, a rise in piracy and the blocked Vodafone merger.

5. Winning new investors

Foundation Sky TV backers the Todd family, Craig Heatley and News Corp have all exited stage left. And earlier this year, Sky's largest institutional investor, New York-based BlackRock, slashed its stake. How can Stewart win back the smart money or woo new investors?

Following steps 1 to 4 might be a good start.

And he does need a good start, given his base salary is higher than that of his predecessor, John Fellet.