Kiwi competition watchdog the Commerce Commission rejected a merger request from Vodafone and dominant pay TV company Sky TV. The two companies are not expected to appeal the decision. The rejection announced yesterday focused on Sky’s dominance of sports rights in New Zealand. ComCom chairman Dr Mark Berry said: “The central question was whether the merged entity would be able to leverage Sky’s premium sports content to such an extent that over time it would reduce competition in the…broadband and mobile markets.”
The Voda-Sky rejection surprised many in the broadcast and media sector, but reflects a more aggressive approach from the regulator, for the media at least. It will be discouraging for NZME and Fairfax New Zealand, who are waiting for ComCom’s final decision on their merger, set for March 15. A draft decision pointed to serious concerns about such a merger – specifically over the danger it would limit the number of voices in the news media. Most commentators believe the so-called Fairfax/NZME merger is unlikely to go ahead.
Sky TV profit
Sky TV chief executive John Fellet was “very disappointed” in the merger decision which has sent the two firms scrambling for its unnamed Plan B and which sent stock prices tumbling 13.1% over the day. Interim results previously published revealed the pay TV firm lost 36,000 subscriptions over six months to December 31 to 826,135. After-tax profit was down 31% to $59.5m. Sky confirmed guidance from December 16 that EBITDA for the year to June 30 would be down 5%-7% of forecasts of $296m.
State-owned commercial broadcaster TVNZ delivered an after-tax profit of $12.9m, after what chief executive Kevin Kenrick said was unprecedented change in the media industry. Advertising revenue was down 8.4% offset by an increased share of the TV advertising market,TVNZ total digital streams topped 81 million for the period and streams from TVNZ 1 News increased 37%. On demand streams were up 24%.
In an election year, pressure is mounting for a review of TVNZ’s role to increase public broadcasting content. Former Labour Party broadcasting minister Steve Maharey wants privatisation of TVNZ to fund a new new low-cost public broadcasting platform, probably digital. Maharey promoted the plan on Sunday in the first in a series of meetings designed to press for public service values. He estimated the new service could run on the interest from an estimated $200 million sale of TVNZ commercial channels to the private sector.
Kiwi film director Niki Caro has been signed to direct a live-action remake of Disney’s Mulan. She becomes the second woman to direct a Disney project with a budget of more than $100m and only the fifth women to direct a movie over that budget benchmark.