Sky TV closing down igloo, its low-cost pay TV service that lost millions

Joint venture with TVNZ was a flop.

Sky TV is closing igloo, formed in 2011 as a joint venture with TVNZ to provide low-cost pay TV.

Igloo's 13 premium channels and pay-per-view, on-demand movies will cease to available from March 31 next year as Sky cleans house ahead of its merger with Vodafone and a transmission contract expires [UPDATE: Sky TV CEO John Fellet says the closure was not motivated by the pending merger].

Subscribers will be offered Sky Basic at $19.95 a month (the same rate as igloo) until July.

TVNZ invested $12.25 million for a 49% share in Igloo in 2012 but reduced its shareholding size to 34% in 2013 before completely exiting the business in June 2014 by selling its remaining shares to Sky for $1.

The state broadcaster took a $3.2 million charge on asset impairments and a $6.3 million charge in 2014.

Sky surveyed igloo users on the possibility of a Super Rugby pass and more online entertainment content but ultimately launched new services Fanpass to attack those markets and igloo languished as a footnote.

Subscriber numbers were never broken out but Sky did acknowledge they never came close to its first-year target of 30,000. The lack of recording capability was one drawback.So was a relative paucity of ondemand content (factors that caused NBR to predict igloo's failure even before it launched).

Sky could upsell frustrated igloo users to MySky. But for TVNZ, it meant the service was a dead-end.

Igloo's closure will free up a modest amount of spectrum. Sky TV corporate comms director Kirsty Way says Sky has yet to decide whether to use the spectrum for itself or try to find a buyer. 

FLASHBACK: igloo CEO Chaz Savage with Sky TV CEO John Fellet (centre) and then TVNZ CEO Rick Ellis at the December 2011 igloo announcement. The service went live in 2012. Savage quit after a year. Ellis joined Telstra in 2012, where he lead an effort to push the telco's T-Box television service into the mainstream. T-Box was axed in late 2014. He is now CEO of Te Papa.

Destined for MOTAT (or maybe just the bin): An igloo set-top box.

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