ZB

Race against time: Sky TV blames Covid, war as new box delayed

Author
Chris Keall, NZ Herald,
Publish Date
Wed, 6 Jul 2022, 9:52am
Delayed: Sky's new box, which will offer regular channels over UFB fibre, negating the need for a dish, offer 4K ultra high definition and support third-party apps like Netflix. Photo / File
Delayed: Sky's new box, which will offer regular channels over UFB fibre, negating the need for a dish, offer 4K ultra high definition and support third-party apps like Netflix. Photo / File

Race against time: Sky TV blames Covid, war as new box delayed

Author
Chris Keall, NZ Herald,
Publish Date
Wed, 6 Jul 2022, 9:52am

Sky TV's new box won't appear this month, as originally scheduled, with the firm blaming Covid supply chain issues and the war in Ukraine.

It says staff trials will begin next week, but it now can't give any date for even the initial rollout to customers.

The delay will be of keen interest to about 100,000 customers of Vodafone TV, who are being offered Sky's new box after the telco switches off its service in September.

In the same month, Freeview On Demand ends, after TVNZ's hardnosed commercial decision to withdraw from the streaming service offered by the collective.

The collective's shareholders also include RNZ and Whakaata Māori (Māori TV) and the TVNZ decision could mean a bloc of viewers reassess their options. Sky can't say at this point if it will offer its new box to non-Sky subscribers, which would be a way to hook Freeview On Demand users into its Neon and Sky Sport Now services.

Sky's new box, which will run on Google's Android software, will offer all Sky's regular channels over UFB fibre - negating the need for a dish on the roof.

It will also offer Netflix, Disney+, Amazon's Prime Video and other third-party apps and support 4K Ultra High Definition.

Many customers will see it as a long-overdue refresh that adds features that have been available elsewhere for a good half-decade, but Sky says customers who want to stick with its existing decoder can do so.

The pay-TV operator will be wary of the shock-of-the-new. While streaming over fibre is now familiar to most Kiwi households, Sky will be mindful that its relatively modest decoder interface changes in 2015 sparked a backlash from confused customers.

"We have an incredibly dedicated and diligent team working around the clock on the new Sky Box alongside our chosen global partners," Sky chief corporate affairs officer Chris Major said last night in response to Herald questions.

"Yes, the timelines for delivery of the project have been impacted due to factors outside of our control – including from global chipset shortages, Covid interruptions to resources and supply chains and, more recently, the impacts on the same by the war in Ukraine."

Technical trials are now under way with specialist Sky staff, and a wider staff trial is to start next week, Major said.

An interface for the new Sky box that was included in a customer survey. Image / Fiel

An interface for the new Sky box that was included in a customer survey. Image / Fiel

"Customer trials will follow before we confirm the precise launch date, acknowledging that we are determined to deliver the transformational Sky Box experience our customers deserve.

"We are very aware of the needs of customers on the Vodafone TV platform."

The company says there will be a further update in the coming weeks.

Sky lost years of development time on its new box as it put its own efforts on hold during two years of talks and regulatory pushing to merge with Vodafone NZ.

It was envisaged that Vodafone's internet TV technology would form the basis of Sky's next box. However, the Commerce Commission blocked the merger in 2017.

Vodafone pushed ahead with its own Vodafone TV box as a Sky partner. Then Sky CEO John Fellet initiated work on a next-generation Android box, which was showcased to investors - only for the project to be axed by Martin Stewart after he took over the chief executive role in 2018. It was later rebooted, and has been seen through to its near-rollout stage by the pay-TV provider's latest boss, Sophie Moloney.

Last month another strategic complication came as Sky TV entered talks to buy MediaWorks but ultimately walked from the deal after an investor backlash.

Asked if the delays would impact Sky's profit or capex guidance, Major said, "We've just finished our financial year and will be reporting to investors shortly. We are in compliance with our continuous disclosure obligations. We'll be updating the market on our results in August."

Major added, "We've always planned for a phased roll-out of the new Sky Box, starting with our most loyal customers as well as the Vodafone TV customers who are transitioning to Sky. So we're comfortable with the current timetable,"

Sky shares closed Tuesday at $2.39. The stock is up 39 per cent for the year amid subscriber gains and stronger financials that the company says will allow it to resume its dividend from September.