Industry speculation is intensifying over Amazon’s interest in the New Zealand rugby broadcasting sporting rights.
Morningstar analyst Brian Han said yesterday the Super Rugby rights were the crown jewel in Sky Network TV’s content arsenal and it was estimated the cost to the group was about $60million a year, or 17% of programming base costs.
The five-year rugby rights to Sky expire in 2021 and the process for the rights from 2022 would start early next month.
The early start was thought to have been designed to provide Amazon plenty of lead-time to prepare the infrastructure if it won, he said.
"All these developments are eroding Sky’s historical competitive edge to such an extent we do not believe a moat rating [competitive advantage] is warranted."
Sky’s satellite delivery infrastructure was no longer the main means by which New Zealand consumers got video entertainment products outside free-to-air television, Mr Han said.
Subscription-video-on-demand (SVOD) was increasingly providing an alternative to traditional pay TV and, with a monthly price of about $20 a month, was making consumers question the value of paying $80 a month for traditional pay TV tied to the set-top box, on a bunch of channels, most of which they did not watch.
Sky would also face increasing competition to retain popular sports broadcasting rights as they came up for renewal, particularly from Amazon, whose financial power and wider commercial interests could easily trump Sky’s capacity to retain those rights in a competitive auction, he said.
