New Sky TV boss Martin Stewart has cancelled the Android-powered "puck" promoted as a key part of the company's technology roadmap by his predecessor, John Fellet.

The Apple TV-sized puck was going to deliver all of Sky TV's channels over the internet, rather than a satellite dish, and feature support for Netflix and other apps (making it very similar to the "Vodafone TV" device sold by Vodafone NZ today).

Instead, Stewart wants to forget about investing in new hardware and focus on upgrading Sky's Neon and Fanpass apps, according to an update filed with the NZX this morning.

"Customers who prefer to consume our sports and entertainment on a set-top box are already well served with My Sky, which offers reliability and great functionality, and they all get complimentary access to our Sky Go app," Stewart said.


Similarly, Stewart's technology roadmap makes no mention of the "next-generation set-top box" (or decoder) promoted by Fellet at an investor day last year. The last My Sky upgrade cost Sky around $120m to develop and deploy. That product is not referred to in today's NZX filing but a spokeswoman said it has also been axed.

Sky TV could not immediately answer a question about how much had been spent developing the puck. A spokeswoman did say it was assessing whether any of the R&D could be "repurposed."

Stewart has already said he will invest more in streaming, and make more entertainment and sports content available online.

Sky TV 24-month NZX share performance. Source / NZX.
Sky TV 24-month NZX share performance. Source / NZX.

However, details of a revamped sports app won't be available until August.

Around the same time, Stewart - who recently axed the Rugby Channel - has promised an overhaul of Sky's sports channels.

The pay TV broadcaster needs to reestablish itself as the home of sport and fight harder to keep sports rights, Stewart told the Herald in March, shortly after he took up his new role.

Executive cleanout

Sky TV's problems are well documented, from Netflix to piracy to Spark's grab for sports rights, to its failed attempt to merge with Vodafone to shrinking subscriber numbers and dividends and declining revenue per subscriber as the online generation becomes acclimatised to paying less for content.

Pundits say Stewart has his head screwed on and praise his broad strategy. But ahead of today's announcement, details had been scarce.


Since he began at Sky, the Brit has cleared out most of the executive team.

Longtime director of sport Richard Last was one of the first to leave the building after Stewart arrived.

A sweeping cleanout also saw the broadcaster's CFO, chief technology officer, sales and marketing director, strategy head, ex-CEO John Fellet depart the board.

Last was replaced by Teixeira in an internal promotion.

Analyst: Finally learned from misdeeds

Fat Prophets research head Greg Smith, who had a briefing with Stewart, wrote over the weekend that Sky TV's shares are now cheap at a time when its performance is improving.

However, given it's one of the poorest performing stocks on the NZX - its shares have lost around 80 per cent of their value since 2014, a period during which the NZX50 has doubled - the phone could be off the hook.

Sky TV subscriber numbers. Source / Sky TV.
Sky TV subscriber numbers. Source / Sky TV.

"From a valuation point of view, Sky is trading on just two times Ebitda (pegged at $230-235 million for FY19) and six times earnings (with a 10 per cent dividend yield). This suggests that investors generally are pricing in Armageddon for the satellite TV operator. But debt has been going in the right direction, and initiatives continue to ramp up to arrest the earnings attrition," Smith said.

"I could be wrong, but I think there is legitimate evidence that Sky has finally learned from the misdeeds of the past and has already 'lifted its game' in many areas. Will anyone notice? We may have to wait till the full year results in August, and maybe even longer, but certainly the bar of expectation is set very, very, low."