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Sky NZ profits fall sharply but streaming subscriptions grow amid rights drive

New Zealand wing Ben Smith breaks past Dillon Lewis on his way to scoring his team's third try during the Rugby World Cup 2019 Bronze Final match between New Zealand and Wales (Photo by Stu Forster/Getty Images)

Pay-television broadcaster Sky New Zealand has reported a 78-per-cent fall in half-year profit but has hailed a growth in subscriptions to its streaming services amid its sports-focused media-rights and sponsorship drive.

Sky’s net profit after tax for the six-month period to December 2019 was NZ$11.9m (€7m/$7.7m), while its operating costs, excluding depreciation, increased by seven per cent to NZ$295.1m.

The total number of Sky subscribers increased to 795,000, with the broadcaster posting a 74-per-cent uplift in streaming customer numbers. The number of streaming subscribers rose from 113,000 in the first half of 2019 to 196,000 as they increased at a faster rate than the number of satellite subscribers fell.

Sky hopes to reach 1 million customers in 2021 and cited the recent acquisition of OTT entertainment platform Lightbox from telecoms operator Spark as a move that will “continue the momentum” of its subscriber growth. An additional 130,000 Lightbox subscribers were added through the takeover deal.

In August, Sky acquired OTT streaming service RugbyPass, an investment the broadcaster said provides it with the opportunity to grow its business overseas.

Sky posted six-month revenues of NZ$384.8m, which represents a fall of five per cent from the previous period. Sky said this is in line with reconfirmation of its full-year 2020 guidance range of NZ$750m and NZ$770m.

During the period, Sky agreed key rights renewal with New Zealand Rugby running from 2021 to 2025, extending its existing broadcast rights to competitions organised by Sanzaar, rugby union’s regional governing body comprising the unions of South Africa, New Zealand, Australia and Argentina.

In recent months, Sky New Zealand has also struck rights deals for golf’s Masters, the ATP Cup tennis tournament, LPGA golf events, the Commonwealth Games, and the domestic National Basketball League.

Sky also last month signed a wide-ranging, three-year deal with the World Surf League, through which it will serve as a major sponsor and broadcast partner of March’s Piha Pro WSL Challenger Series event before taking on exclusive broadcast rights for all major events.

On the sponsorship front, the broadcaster signed a long-term deal with New Zealand Rugby League focusing on the women’s game, while it was also unveiled as the presenting sponsor of the annual New Zealand Open golf tournament.

Sky chief executive Martin Stewart said: “We are pleased to have grown our customer numbers and to have made strong progress across all of our strategic objectives…

“…our new and enhanced streaming services are attracting new customers to Sky, and we are also firmly focused on super-serving our satellite customers. One of the pleasing outcomes is seeing the 25-per-cent growth in satellite customers who are also streaming our content on Sky Go, and we’ve had excellent feedback about new features like the ability to cast to big screens and download-to-go.

“The Lightbox acquisition and our investment in ground-breaking new digital services gives us confidence that we will continue our growth trajectory. We have reached 925,000 customers this month, an all-time high for Sky, and have now set our sights on reaching the one million mark.”