Sky TV reveals new content delivery partner – the impact on customers

Sky TV, which recently elicited grumbles from customers as it raised prices and shuffled channel numbers, could have more gripes on the way.

Before the end of the month, it will switch content delivery partners (from Kordia to Akamai) for its iSky on-demand service, which sees pay-per-view content and catch-up TV delivered via broadband.

What’s the practical effect?

Right now, people who use Vodafone, Slingshot, Snap, Woosh, XNet or Farmside as their ISP get iSky data “unmetered.” That is, it doesn’t count toward their internet plan’s monthly data cap.

The change will means iSky data will count toward your monthly data allocation.

While around half of homes are signed up to Telecom for their internet (Telecom has never had an unmetered arrangement for iSky), Vodafone (29%), Slingshot (9%) and Orcon (5%) have decent market shares, while Farmside has a lock on the rural market.

Sky TV has been using state-owned Kordia for its iSky content delivery network (CDN). It will switch to Boston-based global player Akamai by “late June,” Sky TV corporate communications head Kirsty Way tells NBR ONLINE.

The move is something of a blow to Kordia, which is looking to translate its dominance in terrestrial, traditional broadcasting into a major internet content distribution presence.

Ms Way says Sky TV chose to go with Akamai not so much for price as “speed and reliability of service for our customers.”

A technical issue meant the plug had to be pulled on unmetered data partnerships with ISPs with the changeover.

iSky users should be looking at faster, more reliable content over broadband – but the irony is that with the disappearance of unmetered data, they might be more hesitant to use it.

Modest uptake
Sky TV’s 2012 Annual Report suggests iSky, launched in 2010, has been slow to catch on.

It says 231,665 customers (of 27% of its 846,931 total) had registered for the service.

As of the June report, registered customers view approximately 127,000 hours of iSky content a month – or roughly a half-hour each, if averaged out.

NBR asked Sky TV for updated figures. The broadcaster was not immediately able to provide them, but Ms Way says data caps are increasing.

Data caps increasing - but still mean
Sky TV points to the fact ISP’s are now offering more generous data caps.

That’s true. A Statistics NZ report released in October last year said the average ISP subscriber’s data cap was 16GB – double the previous year. Telecom’s entry-level offer – the default for many in middle NZ – now offers 30GB; its fibre plan starts at 50GB. Caps are on the up, if still not nearly at the level to sustain regular TV and movie viewing via the net.

Interestingly, Sky TV’s online data usage guide says a 90-minute movie uses 875MB (less than 1GB) of data – indicating it’s very much standard definition digital.

A movie in 720p HD (high definition format) downloaded or streamed from a service like Apple’s iTunes, accounts for roughly 2GB of data; a film in 1080p or “full HD” around 4GB.

Although not offering detailed figures, Ms Way says iSky usage is increasing.

Earlier, Sky TV CEO John Fellet told NBR a software upgrade would see iSky integrated into MySky decoders – meaning iSky content could be watched on a TV rather than a PC.

Shake a leg
NBR thinks Sky TV should accelerate its online moves. The pay TV broadcaster has a (hard-won) lock on rights to a lot of juicy content, including online rights. But that doesn't buy it any time. Many are already seeking  on-demand content elsewhere.

Sky TV [NZX:SKT] closed at $5.76 yesterday, toward the top of their 52-week range ($4.50-$5.90).

Forsyth Barr has a buy rating on the company, with a 12-month target of $6.45.

ckeall@nbr.co.nz