Sky's new box will be powered by Google's Android software, support third-party apps like Netflix and Disney+, offer 4K Ultra HD resolution, and deliver Sky's pay-TV channels over fibre - doing away with the need for a dish.
Sky's new box will be powered by Google's Android software, support third-party apps like Netflix and Disney+, offer 4K Ultra HD resolution, and deliver Sky's pay-TV channels over fibre - doing away with the need for a dish.
Sky TV's new box is moving closer. At the company's annual meeting this morning, shareholders were shown the first image of the new hardware (see photo above), which is similar in dimensions to an Apple TV unit.
The company also reaffirmed its current forecast for first revenue growth in fiveyears; revealed a new strategy which will see a "significant downsizing" of its Mt Wellington headquarters in favour of more staff working from the CBD or from home; and outlined medium-term revenue growth targets.
The new box will be powered by Google's Android software, support third-party apps like Netflix and Disney+, offer 4K Ultra HD resolution, and deliver Sky's pay-TV channels over fibre - doing away with the need for a dish.
An image of a possible interface for the new Sky Box, as included in a Sky customer survey. Photo / Geekzone
Sky has been losing exclusivity on entertainment content as studios increasingly want to offer direct-to-the-consumer apps on top of broadcast deals. But with its new box, CEO Sophie Moloney says Sky will remain the most convenient option, offering a one-stop shop for content.
Exactly how one-stop is still up in the air. Moloney says Sky is open to hosting any app on its new box, including Spark Sport - but that will come down to negotiations between the two companies close to the release of the new box. Today, Sky had no advance on the previously flagged "mid-2022".
Moloney says customers who prefer the current Sky decoder will be able to stick to that. At the other end of the spectrum, Sky has to be wary of the appeal of smart TVs, which carry a broad range of apps. Some analysts see the new box as a positive, if several years later than many expected. Sky TV in the UK this month launched Sky Glass - a house-brand standalone TV that has its services, apps and wi-fi built-in, which dispenses with the need for any type of box.
"We admired the new Sky Glass TV when Sky UK revealed it earlier this month. We have already connected with both Foxtel and Sky UK on this opportunity and will watch with interest as they roll it out," Moloney told the Herald soon after the AGM wrapped up.
"And of course [we] are open to further discussions if it is something our customers want in this market and which can be made to work from an economic perspective. For now, we know it is the joy of the hybrid connection and new user interface that will make the new Sky Box sing for our customers."
Sky chief executive Sophie Moloney: "We expect to see streaming revenue growth outstripping the decline in Sky Box revenue for the first time in FY22. Photo / Supplied
Chairman Philip Bowman told shareholders, "It is a year of investment to fuel future growth. Delivering the new hybrid Sky Box is critical to our plans to cement Sky's role as the preferred aggregator in the New Zealand market."
"Broadband is another key area of investment," Bowman said. Sky is offering its new Sky Broadband service at a cut-price rate for customers who also subscribe to its pay-TV service in a bid to reduce churn, and add to the service's one-stop-shop convenience factor.
Today, the company refused to reveal the number of Sky Broadband sign-ups (change could be coming behind the scenes, with Orcon Group, which provisions Sky Broadband in merger talks with 2degrees).
Sky did reaffirm its guidance, first given at its full-year 2021 result, that its current financial year will see its first revenue growth since 2016.
The reason: gains from streaming services Sky Sport Now, Neon and Rugby Pass are now offsetting losses from the company's traditional decoder business.
"We expect to see streaming revenue growth outstripping the decline in Sky Box revenue for the first time in FY22. We remain very focused on stabilising and then, with our new box, growing the Sky Box base," Moloney said this morning.
Moloney told shareholders that the pandemic continues to be swings and slides for Sky, with the crimped sports calendar balanced by lockdowns driving more subscribers to entertainment options.
Bowman said the plan to downsize Sky's Mt Wellington headquarters was being refined, amid delays caused to the Colliers-managed process due to ongoing lockdowns.
Sky is now offering all of its buildings on the site for sale, and will now only lease back a portion.
"Management, supported by external consultants, are finalising a property strategy that includes significantly downsizing our Mt Wellington footprint, a higher-profile presence in a central Auckland site, alongside a commitment to an 'anywhere works' programme that enables many of our crew to work flexibly between their homes and the company's sites," Bowman said.
When will the divvy return?
A number of investors had questions about Sky's dividend, which has been on hold while the company invests in new streaming technologies.
Bowman said there was still no timeline for the return of the profit payout.
But he did offer that the dividend situation would be reconsidered in February, subject to the successful completion of the property deal.
Medium-term growth goals
Shareholders were told today that Sky is on track to meet its numbers for the current year.
That is, revenue of between $715m to $745m for its year to June 2022, ebitda of $115m to $130m and net profit of $17.5m to $27.5m (see the company's FY2021 numbers in the table above).
Investors were also told that Sky is targeting revenue gains of $75m to $100m per year by 2023 (from the current target of $5m to $35m per year).
And that Sky is aiming to reduce churn (net customer turnover) from today's 12 per cent to 10 per cent by 2024.
The company is also aiming to accelerate operating expenditure cuts from FY2022's $1m to $10m to $10m to $15m within three years.
Sky shares were flat at $1.88 in midday trading.
The stock, which recently had a 10:1 consolidation, is up 23 per cent for the year.
