Sky TV is the monopoly pay-TV services provider in New Zealand, having a satellite distribution platform covering the whole of the country. Critically, emerging competition was likely to gradually affect Sky TV’s high-margin, high-free-cash-flow business model. On costs, the company had the capacity to bid more aggressively for popular content, given its large subscriber base and strong free-cash generation. "We think the magnitude of risk is higher for Sky given Netflix and Lightbox are now established in the New Zealand market. Sky still needs 12 months to execute its own technology refresh path and it has lower brand equity with consumers."

Source: Otago Daily Times March 02, 2018 15:56 UTC