Sky has slashed the price of its no-contract streaming service to $13.95 a month - making it more competive with Netflix, which recently jacked-up its pricing.

Neon draws heavily on Sky's NZ-exclusive contract with HBO, and features binge-worthy classic series like Game of Thrones, Big Little Lies and Chernobyl, plus movies like First Man and Bohemian Rhapsody.

Neon previously cost $20 a month for its full-blooded version, including TV and movies - although there was also $12/month version that only offered TV series. That option has now been axed, meaning some users will pay more. There is now only one plan - the $13.95 a month offer that includes all content.

Netflix recently bumped the monthly price of its Basic plan by 4 per cent to $11.99, its Standard plan by 13 per cent to $16.99 and its Premium plan by 19 per cent to $21.99.


Netflix $16.99 Standard plan is the most directly comparable to Neon. Both let you stream to up to two devices at once in HD (high definition).

The Spark-owned Lightbox lets you stream all the TV shows you like on a $12.99/month (two screens) or $15.99/month (four screens) plan. Movies cost between $4.99 and $6.99.

Amazon Prime, which charges Kiwis in US dollars, costs US$2.99 ($4.30) a month for your first six months then US$5.99 ($7.20).

Disney Plus, which will hit NZ in November, will cost $9.99 a month or $99.99 a year.

Netflix is still the king in terms of having the most content, and being the only service that offers a 4K or Ultra High Definition option (on its $21.99/month four-screen plan).

Still, new Sky TV boss Martin Stewart is making good on his promise to make Neon more competitive and make up for lost time - a lot of lost time - in the streaming market.

But so far, only to a degree. Unlike Sky's sports streaming app, Sky Sport Now (formerly Fanpass), Neon has yet to appear as an Apple TV app - a popular platform with streaming fans. Sky said this morning that a Neon app for Apple TV was "under consideration." (See Neon's existing device support here).

At its recent full-year result, Stewart revealed Sky had written-off $38 million as it axed a decoder upgrade planned by former CEO John Fellet. The new boss prefers to re-focus investment on streaming.


Investors are still far from convinced. Sky shares closed yesterday at $1.12, hugging their all-time-low.

But there are early signs of success. At its FY2019 full-year result, Sky made an overall net gain in subscribers for the first time in three years, thanks to Neon and Fanpass/Sky Sport Now subs rising enough to offset a fall in the broadcaster's satellite business.

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Sky said its streaming customers rose from 107,000 to 161,000 in the year to June 30, though it didn't break out how many of those were with Neon, and how many with Fanpass (or both).

Sky did give some flavour around how many are streaming vs watching broadcast TV, however, at its full-year result briefing.

Stewart said 55,000 watched the second Bledisloe Cup test online via Sky Go or Sky Sport Now, 523,400 on Sky decoders and 408,000 free-to-air on Prime's delayed coverage.

Those stats show both that streaming is tangible - but also that Sky is still drawing the bulk of its sports revenue from its decoder business (where a Sky Sport sub costs $31.99 a month on top of an obligatory $25.99 Starter plan).

Netflix, Amazon and Lightbox have never released paid subscriber numbers. But an August 2018 Roy Morgan survey said 1.9m New Zealanders lived in households with Netflix access. And Spark has said more than 300,000 have signed up for Lightbox (though it won't break out how many of those got it free by dint of being a Spark broadband customer).

Stewart earlier halved the price of Fanpass (albeit from a nosebleed $99/month, a go-away price installed by previous management who feared cannibalisation) and added more content as it was rebranded Sky Sport Now.

The move to streaming is a double-edged sword for Sky. There are no expensive decoders or satellite installation costs to subsidise, but punters are also acclimatised to paying a lot less for streaming.

The net result was that although Sky gained more subscribers in 2019, its average monthly revenue per sub dropped from $77.73 to $74.84 and its overall revenue and profit sunk.

And Stewart is watching Disney Plus nervously. Its November arrival will break Sky's longtime near-monopoly on Disney content for NZ.

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Sky will have to be worrying that HBO will eventually follow suit with its own straight-to-the-consumer app, HBO Max.

And it was notable that at Sky's full-year results briefing, as he namechecked various factors behind a massive goodwill writedown, Stewart mentioned that Disney now is selling a US$12.99/month bundle in the US that also includes Hulu and ESPN+ (Hulu, which offers contemporary content from most studios and US free-to-air networks, was historically co-operatively owned, but recently Disney has lifted its stake to 50 per cent; Disney owns 80 per cent of sports giant ESPN).

And Stewart will also be keenly aware of Disney's statement that, ultimately, it wants Plus to be the only online source for its original content.

And in the near-term, Disney is looking for local partners for Plus across Australia and NZ - telcos, ISPs and streaming services for sales and marketing partnerships. Vodafone NZ could be eyeing it for its Vodafone TV platform (the telco would not comment, bar saying it was always open.

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Sky will also have an eye on Netflix's recent move to open an Australia-NZ office, putting boots on the ground for the first time. The streaming giant has just released a rom-com set in New Zealand (the super syrupy Falling Inn Love) and there will likely be more local content to follow.

Netflix' new romcom Falling Inn Love, set in New Zealand. Photo / Netflix
Netflix' new romcom Falling Inn Love, set in New Zealand. Photo / Netflix

Sky and Spark will be fine with that, given both are putting most of their energy into sports rights, and particularly local sport as the entertainment market globalises (Netflix has so far shown zero interest in sport, while Amazon has been dipping its toes into US and UK codes).

In March, Spark said it was looking for a partner for Lightbox - a move seen as a precursor to a possible sale. There's still no word on that front.

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It's yet to be seen whether Spark's new CEO Jolie Hodson will want to go toe-to-toe with Sky over key rugby, cricket, netball and NRL rights over the next 12 to 24 months as Sky suspends its dividend and opens a new $200m credit line as part of its efforts to build a sports-bidding war chest.

Sky recently expanded further into sports streaming with its purchase of global player Rugby Pass in a deal worth up to $62m.

So far, that's been one of the few standout original moves in a streaming war that has, otherwise, been very by the book.