Sky TV’s hold on the NZ market

By Ruth Laugesen| Published on June 27, 2012 | Issue 3764 - New Zealand Listener

A television revolution that is ushering in a brave new world of media might pass New Zealand by because of Sky TV’s hold on the market.

Photo right - Getty Images

When the Olympics open in London in July, New Zealanders will for the first time have to watch the Games on Sky. State broadcaster TVNZ lost the rights in a bidding war with Sky, whose controlling shareholder is Rupert Murdoch’s News Corp. Although Sky will screen hours of coverage each day on its free-to-air channel, Prime, the best events will be accessible only to those willing to pay the $72 a month for a basic subscription and Sky’s sports channels. The Olympics are just the latest sign of Sky’s slow-rolling conquest of the nation’s TV screens, courtesy of a broadcasting industry that, unusually in world terms, faces no special rules designed to thwart the emergence of outsized players. More and more premium content is disappearing behind Sky’s pay walls.

Once upon a time, a BBC show like The Hour would have been prime TVNZ fare. Today, you can only watch it on Sky. Ditto Mildred Pierce, Mad Men and Game of Thrones, which are all behind two Sky pay walls, requiring a basic sub and another $10 a month for the SoHo channel. A full package of sports, movie and other options costs over $150. This month, the launch of a SKY-TVNZ joint venture, a cheaper Sky subscription called the Igloo channel, will extend Sky’s reach, tempting some of the half of households that aren’t yet subscribers.
“Sky is overwhelmingly, unhelpfully dominant in New Zealand,” says an international expert on media regulation, Professor Dwayne Winseck of Carleton University in Ottawa. And as we stand on the brink of a revolution in media that should be bringing cheaper, on-demand content, Sky may be on the way to locking up access to that, too. With the laying of the Government’s $1.5 billion ultra-fast broadband (UFB) network under way, we were promised a new “a la carte” world of media, in which we would be able to watch movies and television shows when we want, via the internet, hopefully at a fraction of the cost of a Sky subscription. Pundits predict that by 2015, 80% of this country’s internet use will be video-watching.
But last month the Commerce Commission launched an investigation into whether Sky has unfairly shut out competitors in the growing market for entertainment delivered by broadband. At the heart of the commission’s probe is Sky’s confidential contracts with the major internet service providers, which Sky chief executive John Fellet confirms stop the providers entering into relationships with any other entertainment providers without Sky’s approval. The deals also prevent internet providers seeking their own broadcasting content, instead requiring them to ask Sky to get content for them. The commission is also investigating whether the media giant’s exclusive deals with Hollywood studios will keep newcomers from offering an attractive variety of film and television content to customers. And behind these concerns is a bigger one that Sky, a privately owned company, might hog the benefits of the taxpayer’s massive investment in broadband by being the player best positioned to deliver internet content.
Full story at New Zealand Listener