Streaming video: most favour Sky TV's pending Netflix-style service

More New Zealanders would like to trial a new internet TV service proposed by Sky TV than other services, according to a new survey.

Sky says it will launch the $20-a-month Neon TV in December. Like Netflix in the US, and local contenders Lightbox ($15/month) and Quickflix ($12.99), it will let subscribers download all the shows they want for a fixed monthly fee. Neon content will be delivered over an internet connection to an iPad or computer, with options to watch it on a regular TV via wi-fi gadgets or HDMI cable.

A Horizon Research survey finds 20.7% of adults, equivalent to around 662,000 people, would like to trial the Sky service, expected to be made available late this year.

TV apps from Google are next most favoured for trial (17.8% of those aged 18+), followed by Netflix (14.2%) and the Lightbox service (11.5%) launched by Spark (formerly Telecom) but open to customers of any ISP.

Netflix is not officially available to New Zealanders. But thousands use software to work around its regional restrictions, or take advantage of the "global modes" offered by ISPs Orcon, Slingshot and MyRepublic to easily access Netflix and other offshore services. And the US giant has made positive noises about our part of the world and recently hired ad and social agencies in Australia.

Respondents are least interested Quickflix (55.4%) and Video Ezy’s new on-demand pay-per-movie download service (54.9% not interested).

Outlook for Lightbox
The survey indicates that, at the time it was taken, 84.6% of adults were not going to take up the Lightbox service. 

A 0.7% subscription rate equates to about 24,000 people or about 10,800 households subscribed, 9300 household intending to subscribe, 40,000 households on Lightbox' one-onth trial option and 148,999 households would like to trial, Horizon Research principal Graeme Colman says.

The survey indicates Lightbox is converting one in three people who trial to a subscription.

At Spark's full-year results presentation, CEO Simon Moutter said the company was aiming for 70,000 Lightbox subscribers by June next year. At its current rate of trailist adoption, and its current conversion rate, the services is on track to secure around 62,000 subs by its target date, Mr Colman tells NBR (personally, I still think it's a tough ask. And it'll get harder once Sky's Neon launches, and if Netflix arrives in the New Year).

Overall, the streaming video ondemand outlook seems favourable for Sky TV, with no single competitor set to gain any scale. But the pay TV broadcaster still faces a possible death-by-a-thousand-cuts scenario. HBO will soon sell its content directly to consumer over the internet in the US, and several other (as yet un-named) countries (read HBO move should send a chill through Sky TV). And dedicated services, like Coliseum Sports Media's PremierLeaguePass and pending PGATourLive, have started to appear on the radar. 

Sky is charging more for Neon TV than rivals, but it also has more — potentially — to offer with its movies and HBO content. It remains to be seen how much will make it to Neon TV however, or whether any first-run content will be on offer. From an investor point-of-view, Sky will be trying to offer enough to keep new online competition at bay without cannibalising its traditional service.

Horizon Research surveyed 1088 adults between September 13 and October 14, 2014.

The survey was carried out for syndicated sale rather than on behalf of any particular client, Mr Colman says.

Most market research firms use phone surveys. Horizon uses an online panel 

Mr Colman says the online panel was recruited to reflect the national adult population at the 2013 census, and responses were also weighted to reflect census data.

weighted to represent the national adult population at the 2013 census. At a 95% confidence level, the maximum margin of error is +/- 3%.

ckeall@nbr.co.nz

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