Chris Rattue: Simple solution to Sky's crisis

Various pieces of technology in the Sky TV control room in Mt Wellington. Photo / Sarah Ivey

There is a ridiculously simple solution to Sky TV's crisis - substantially lower the subscription prices.

The latest yearly report shows Sky is leaking subscribers the way the Wallabies conceded points in the first half in Sydney. Sky has allowed itself to be fooled by its former paradise.

Sky's package inflexibility and pricing has of course hurt and excluded beneficiaries and low wage earners the most, those who don't have much of a voice and get shouted down when they or their champions do speak up.

Profits are down about 20 per cent, to $116m. But Sky may need to accept a further hit, to simply survive.

Sky has been inflexible and expensive for too long, but you are consistently hearing about it now because the disappearing financially-secure middle classes - who do know how to get their voice across - are feeling the pinch and quitting the service.

Long term, Sky as we know it may fall out of the sky. But I'd like to see it last for as long as possible, with one major adjustment. The pricing, obviously.

Far from being an opponent of the existing model, I actually think it is brilliant. We get an amazing menu of world class sport with some grass roots thrown in, a one-stop-shop which promotes and reflects diversity.

There are quality issues, including a screwy view on analysis highlighted by a lick-lick-slurp-slurp relationship with New Zealand Rugby which needs to be licked.

There is also a major moral problem with its belief they have the right to outright own coverage rights, thus attempting to severely restrict how much of their video other outlets can use.

This ignores many things: all those volunteers who underpin every sport and provide the base for professionalism, all the rate and taxpayer money which provides parks and facilities great and small, and even a state school system turned over to rugby as a recruitment, development and promotional arm.

Subscriber TV is based on sport. But I would argue that positioning virtually all significant sport behind an over-priced paywall will actually hurt our sport. Sky will say it makes it available on Prime, and that in turn will hurt Sky. As the corporation is finding out, people are willing to ditch sport for the delights of Netflix and Lightbox, and there are plenty of delights on those well-priced channels (at the moment, I'm getting both "free" on a phone deal).

This is a very simple theory, and I'm sure Sky's long-serving CEO John Fellet would love to shoot it down in flames. But a massive effort to overhaul the business with the aim of lowering subscriptions would draw in more customers and offset a portion of the losses. If they can't adapt, Sky deserves to crumble, completely.

And Sky does face a growing threat from illegal streamers. As a British survey showed, many people in their late teens and early 20s regard free viewing as a mandatory part of life.

Sky has added brilliantly to many of our lives and Fellet may see this column as simply not cricket, because media companies such as NZME are in dispute with Sky at the moment over fair dealing with video rights.

But the man seems so out of touch, like his prices.

Sky rails against those companies who he sees as pirates, likening it to his company reading out newspaper clippings without paying. It is a very silly claim, in detail and effect.

Newspaper articles are freely available on the internet anyway. More importantly, it is an apples and oranges argument which distracts from the real problem that watching sport is becoming increasingly difficult for the masses.

Under Sky's monopoly, sport is priced for the rich - how many average wage earners can even afford the alternative and take their family to a test match?

An Auckland bloke in his early 20s told me recently that the cost of living here was so extreme - a situation he was not responsible for - that he regarded any viewing he could freely get from outfits like Sky as his absolute right. He saw life more as society stealing from him - Sky had absolutely no chance of getting a monthly $100 out of his account anytime soon.

He didn't give a stuff about Sky and the law, because Sky - and all the other powerful people in life - cared only for their own riches and didn't give a stuff about him.

I'll finish this with a random thought. In some ways - with the good old street march a thing of the past - illegal streaming has become a new and entertaining form of protest and rebellion.