A VISUAL - WATCH WHATEVER YOU WANT. WHENEVER YOU WANT IT. ENTER HERE THE AGE OF FREE CHOICE - Sky
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Business Overview
A VISUAL
WATCH WHATEVER YOU WANT.
WHENEVER YOU WANT IT. ENTER
HERE THE AGE OF FREE CHOICE.
12 Annual Report June 2005
42,566 INCREASE IN SUBSCRIBERS
54,960 INCREASE IN DIGITAL SUBSCRIBERS, 13,705 REDUCTION
IN UHF SUBSCRIBERS, 1,311 INCREASE IN OTHER
20.2%
SHARE OF VIEWING IN
619,168 SUBSCRIBERS
AT 30 JUNE 2005 – 538,366 DIGITAL, 78,650 UHF, 2,152 OTHER
NEW ZEALAND HOMES FOR
THE JUNE 2005 YEAR (1)
86 DIGITAL CHANNELS
39.7%
17 BASIC, 4 SPORT, 5 MOVIE, 25 MUSIC, 35 OTHER
118 VIEWING HOURS
AVERAGE VIEWING HOURS PER SUBSCRIBER
(1)
NEW ZEALAND HOMES
CONNECTED TO
SKY AT 30 JUNE 2005
PER MONTH IN THE 2005 YEAR
1,600,402 PAY-PER-VIEW PURCHASES
IN THE 2005 YEAR
“PIRATES OF THE CARIBBEAN – THE CURSE OF THE BLACK PEARL”
MOST PURCHASED MOVIE IN THE 2005 YEAR
1,416,668 VIEWERS OF ALL BLACKS VERSUS
LIONS, 25 JUNE 2005 (1)
THE MOST WATCHED EVENT ON SKY IN THE 2005 YEAR
283,754 VIEWERS OF
“GANGS OF NEW YORK” (1)
THE MOST WATCHED MOVIE ON SKY MOVIES IN 2005
(1) Source: Nielsen Media Research / All viewers 5+ SKY Box Office
Business Overview
THE CONCEPT OF PAY TV WAS REVOLUTIONARY WHEN IT WAS
BROUGHT TO NEW ZEALAND BY SKY IN 1990.
The concept of pay TV was revolutionary > The deregulation of broadcasting in April
when it was brought to New Zealand by SKY 1988 provided SKY with the opportunity to
TODAY
39.7%
NEW ZEALAND HOMES
PAY A MONTHLY
in 1990. Most of the country laughed at a
business plan that was based on customers
paying for a television service. Back in 1990, all
television was free – there were three channels
purchase four national UHF frequencies and
offer a three-channel terrestrial pay TV service
to households throughout New Zealand.
The service commenced in 1990.
TELEVISION SUBSCRIPTION to watch and few could see the opportunity to
> SKY’s UHF service implemented the then
expand the entertainment options available to
recently developed “smartcard” encryption
viewers and charge them for this service.
technology. This meant that cards could be
This shift in paradigm, from a market where replaced if the encryption system was ever
consumers expected all television to be “free”, broken, rather than having to replace the
to a market where consumers are prepared to pay decoder. This ensured the security of SKY’s
for a quality television entertainment experience, pay TV content, creating a scarce commodity
has occurred on a gradual basis. Today, 39.7% of that could be charged for. This system is still
New Zealand homes have accepted this shift and in use by SKY today.
willingly pay a monthly television subscription.
> SKY was one of the first companies in the
This is a lot less than in some markets – such as
world to implement direct-to-home (“DTH”)
the US, where pay TV has been in existence for
satellite television broadcasting in 1997.
more than 50 years – but it is at a scale where
The launch of a satellite television service was
most observers now accept that pay TV is here to
only made possible by Optus Networks Pty
stay. SKY is therefore well positioned to become
Limited (“Optus”) having previously launched
an increasingly important component of all
a satellite (Optus B1) with sufficient
New Zealanders’ discretionary leisure spending.
transponder power over New Zealand.
Fifteen years on, and SKY is still on a mission to This satellite capacity was made available to
be New Zealand’s most successful entertainment SKY on an incremental basis, which facilitated
company. This means SKY must continue to a staged approach to growth.
introduce revolutionary entertainment options
> This increased SKY’s coverage to New Zealand
to enhance its position in the market and provide
homes from 75% on the UHF platform to
returns to its shareholders.
100% coverage, immediately increasing
HISTORICAL DEVELOPMENT the size of the potential market. SKY’s initial
SKY’s business today is quite different from satellite transmissions were analogue, with the
the business that was launched in 1990. capacity to distribute two analogue television
The developments highlight how a market channels per satellite transponder.
can evolve over time and the significant impact
> The development of Moving Picture Experts
that technology can have on a pay TV platform.
Group 2 (“MPEG2”) compression technology
It also highlights the challenge management
enabled more video channels to be
faces in both selecting appropriate technologies
compressed into a data stream. With MPEG2,
and carefully timing their introduction to
SKY was able to distribute 16 television
the marketplace:
channels per transponder. This facilitated
> SKY was originally established as a pay TV multi-channel pay TV via satellite, creating
service offering international sports events a viable alternative to the traditional cable
to pubs and clubs utilising large systems, which can be uneconomic where
satellite-dish technology. populations are geographically dispersed,
such as in New Zealand.
14 Annual Report June 2005
The Living Channel SKY 1 The History Channel
> The move to a DTH satellite service required With a total of 619,168 subscribers at 30 June
significant investment by SKY in a new 2005, SKY’s subscriber base has grown for the
WITH A TOTAL OF 619,168
broadcast distribution system and providing 15th year in a row, to the point where we have
SUBSCRIBERS AT 30 JUNE 2005,
subscribers with new decoders and satellite 39.7% of the homes in New Zealand subscribing
SKY’S SUBSCRIBER BASE HAS
dishes. Competitive threats from new cable to SKY. The net gain in subscribers for the year
GROWN FOR THE 15TH YEAR
entrants meant that SKY was forced to be was 42,566, slightly above the 35,000 to
an early adopter of this technology, which 40,000 that is currently targeted by
IN A ROW TO THE POINT
resulted in high development costs. management each year.
WHERE WE HAVE 39.7% OF
THE HOMES IN NEW ZEALAND
> SKY’s decision in 1992 to offer wholesale This target is set on the basis that this is a SUBSCRIBING TO SKY.
access to its content to third party distributors level of growth that can be managed within
had a significant impact on the pay TV SKY’s current infrastructure and can be
landscape in New Zealand. Both Telecom achieved without having to heavily discount
and TelstraClear obtained the surety of being installation rates, which can increase churn
able to gain access to SKY’s television content or rate of disconnect.
for distribution over their own platforms.
SKY’s research suggests that consumers’ attitudes
TelstraClear now offers SKY content over its
towards subscribing to pay TV change over time,
cable platform in Wellington and Christchurch,
so that at any point in time around 14% (1) of the
while Telecom currently resells SKY’s DTH
population indicate that they would “possibly”
satellite service. These agreements secured
subscribe to SKY, before finally signing up.
SKY’s role as an aggregator of pay TV content,
This percentage has remained reasonably
at the same time preserving SKY’s ability to
consistent over the last six years and continues
operate its own distribution platform. Should
to be at these levels.
new distribution technologies develop in the
future, then SKY is well positioned to continue The ultimate determinant of the economic
to offer its content via third party platforms. value of SKY will be the terminal penetration
level of pay TV in New Zealand.
SUBSCRIBER GROWTH
Management continues
The success of SKY in introducing pay TV to New
to believe that SKY’s
Zealand is demonstrated by the following chart:
penetration will
gradually increase in
35"3#2)"%23
the future, as it has in
the past, and sees no
reason why it couldn’t
grow to the 70%+
levels seen in more
S
mature markets.
&INANCIAL 9EAR
5(& 3ATELLITE 7HOLESALE
(1) Source: Nielsen Media Research – June 2005 Annual Report June 2005 15
Business Overview
THE FOCUS FOR SKY DURING THE 2005 YEAR HAS BEEN TO ENSURE THAT THE
BUSINESS IS WELL POSITIONED TO CONTINUE ON ITS HISTORICAL GROWTH PATH.
STRATEGIC DEVELOPMENTS Television Station Upgrade
The focus for SKY during the 2005 year has been The SKY board has committed to upgrading
to ensure that the business is well positioned to SKY’s 15-year-old television station to a digital,
continue on its historical growth path. A number server-based architecture over the next 36
of strategically important decisions have been months. This will create a tapeless environment
taken during the year and although subscribers which will provide a number of operational
are yet to see the benefits of these, they will be efficiencies. The new station will be designed to
significant to SKY for a number of years to come: output up to 112 standard-definition channels
across two sites and will provide the capability to
Launch of a Personal Video Recorder
offer widescreen on all channels, Dolby 5.1 digital
SKY has committed to offering the next
sound and high-definition (“HD”) television.
generation of a hard-drive decoder, “MY SKY”
also known as a personal video recorder or PVR. Optus D1 Satellite
Already available in the UK, US and Australia, SKY has continued to monitor the construction
this decoder will revolutionise television viewing of the new Optus D1 Satellite, which has been
and will greatly enhance the value of a pay TV purpose-built for SKY’s DTH requirements by
subscription. The features of this decoder are Orbital Sciences of the US. Although there
described more fully on pages 24–25. have been some delays in the construction
programme, the craft is scheduled to be launched
Mobile Video Clips
by June 2006. A second back-up satellite, D1R,
SKY has entered into agreements with Telecom
is also under construction by Orbital Sciences
and Vodafone to provide SKY video content to
and is scheduled to be completed in
mobile devices. This reinforces SKY’s position as
November 2006, if it is required.
an aggregator of content and demonstrates our
willingness to provide content on alternative Audience Measurement System
distribution platforms. One of the challenges in operating a multi-
channel television platform is obtaining reliable
Site Expansion
information on what subscribers are viewing.
SKY is committed to running an integrated pay
SKY has committed to purchasing software that
TV operation from one site. SKY has expanded its
will monitor subscriber viewing directly from the
operations to a neighbouring site and continues
decoder, returning this information to a central
to place importance on closely integrating all
database via a modem. The system is in use by
customer-facing activities with the operation of
BSkyB in the UK and will greatly enhance the
the television station, creation of the content,
information that is available to SKY on subscriber
marketing of the product and with the senior
viewing levels. This information will then be used
management of the business.
to enhance programming decisions and ensure
we are paying fair value for content.
16 Annual Report June 2005
The Living Channel SKY Sport Disney
Renewal of SANZAR Renewal of UHF Network Licences
Viewership figures confirm that SKY’s SANZAR In June 2005, SKY committed to paying a VIEWERSHIP FIGURES
contract, which provides SKY with the exclusive renewal price of $4.5 million to the Crown for its
CONFIRM THAT SKY’S
live rights to all top-level rugby played in four UHF network licences. This money is payable
SANZAR CONTRACT, WHICH
New Zealand (including the Super 12, Tri-Nations in September 2009 and secures SKY’s access to
PROVIDES SKY WITH THE
and NPC), is SKY’s most valuable product. these licences for a further ten years beyond the
EXCLUSIVE LIVE RIGHTS
SKY was pleased to renew this contract in current licence period, which expires in 2010.
May 2005 for a further five years at prices With the licences secure, SKY will evaluate the
TO ALL TOP-LEVEL RUGBY
(in US dollar terms) that were similar to the most appropriate use for them in the future.
PLAYED IN NEW ZEALAND
levels currently being paid. The new contract
(INCLUDING THE SUPER 12,
Optus B1 Satellite TRI-NATIONS AND NPC),
has additional benefits for SKY in that the season
On 23 May 2005 there was a failure of the IS SKY’S MOST VALUABLE
has been extended by the introduction of a
satellite control processor (“SCP”) on the PRODUCT.
Super 14 competition (94 versus 69 games
Optus B1 satellite. This served to highlight
per annum), an expanded Tri-Nations
the importance of satellite communication to
(9 versus 6 games per annum) and an expanded
SKY’s pay TV business and the importance of
NPC (70 versus 48 games per annum).
our relationship with Optus. Optus successfully
Purchase of DVD Unlimited switched to the back-up SCP on B1 and the craft
In October 2004, SKY announced the purchase has been successfully operating on this back-up
of the assets of DVD Unlimited, an on-line DVD SCP since this time. However, if this back-up
rental business. Although subscribers to this SCP were to fail, there would be a loss of signal
service utilise a website to order the DVD titles for SKY subscribers until a new satellite could be
they want to borrow, the distribution mechanism positioned at 160° east, which is where SKY’s
is very low-tech in that DVDs are posted to a subscriber dishes are currently pointing. SKY has
subscriber via NZ Post. This demonstrates that entered into an arrangement with Optus which
the technology for cost-effectively downloading will ensure that a back-up satellite can be moved
movies to a television set is still some way off. into position within seven days, should this be
However, SKY’s involvement in this business will necessary. SKY would meet the costs of this move.
ensure it is well positioned to take advantage of
any future technological developments
in this area.
Annual Report June 2005 17
Business Overview
OF GREAT CHOICE
PROVIDING GREAT CHOICE FOR SUBSCRIBERS MEANS:
Discovery Channel SKY Box Office
CREATING CONTENT THAT
SUBSCRIBERS WANT TO WATCH:
> VIEWING ON BASIC TIER CHANNELS UP 9% (1)
> AVERAGE DIGITAL VIEWING UP 1.1% TO 118 HOURS PER MONTH (1)
PROVIDING A TAILORED PACKAGE OF SERVICES
> 48% OF DIGITAL SUBSCRIBERS PURCHASING THE PREMIUM
“BASIC + SPORT + MOVIE” PACKAGES
> 11,485 SUBSCRIBERS MIGRATED FROM THE UHF TO THE
SKY Sport
SATELLITE SERVICE DURING THE 2005 YEAR
OPERATING A MULTI-CHANNEL TELEVISION BUSINESS IS ALL ABOUT GIVING
SUBSCRIBERS CHOICE AND WITH A TOTAL OF 86 CHANNELS AT 30 JUNE 2005,
THERE ARE PLENTY OF ENTERTAINMENT OPTIONS TO CHOOSE FROM.
SKY’s share of the viewing in New Zealand homes availability of other entertainment options, you
on a twelve-month rolling basis has remained at would expect the number of hours to plateau at
around the 20% (2) level during the 2005 year. some point.
The average level of viewing per subscriber per
It is also interesting to look at where the viewing is
day has also been relatively flat for SKY over the
occurring on SKY. The following graph illustrates
2005 year, at around 3.9 hours (1) per day.
most of the increase in viewing has been
This is not surprising as SKY has not had the
occurring on the pass-through channels, which
satellite capacity to increase the number of
are those on the basic tier for digital subscribers.
channels available to subscribers, so the content
has not changed over the year. This compares to
6)%7%2 (/523 0%2 $)')4!, 35"3#2)"%2 0%2 !..5-
the 25% increase in the moving annual average
viewing during the 2004 year when SKY launched
Disney, The History Channel and UKTV.
The amount of time subscribers spend watching
(OURS
SKY each month is important, as the more time
spent watching SKY the greater value subscribers
are getting from their monthly subscription.
There are, however, only so many hours in a day;
$%# *5. $%# *5. $%# *5.
so with work and family commitments and the
-OVIES 3PORT 0ASS 4HROUGH
(1) Source: Nielsen Media Research / All SKY digital viewers 5+
(2) Source: Nielsen Media Research / All viewers 5+
18 Annual Report June 2005 (3) Source: Nielsen Media Research / All SKY digital viewers 5+, plus SKY data
SKY Sport
OFFERING VALUE
FOR MONEY:
COST PER VIEWING HOUR
REMAINS CONSTANT IN 2005
YEAR AT 53 CENTS (3)
CHURN:
DOWN TO AN ALL-TIME
LOW OF 15.8%
Juice TV
AN INCREASING NUMBER
OF HOUSEHOLDS IN
NEW ZEALAND ARE CHOOSING
TO BE ENTERTAINED BY SKY.
Annual Report June 2005 19
Business Overview
Sports viewing has remained relatively constant mean a decline in gross margin per subscriber
over the year, while there has been a 6% decline as the sports tier costs are fixed regardless of
in movie viewing during the year. The growth in subscriber numbers.
CHURN
WAS LOWER THAN FOR
basic tier viewing is pleasing as there have been
no new channels launched during the year. The
decline in movie viewing is likely to reflect the
The UHF service has fewer options for
subscribers, as the choice is limited to purchasing
a combination of sport, movies and the Discovery
ANY PREVIOUS YEAR continued growth in DVD sales and could also
Channel. The percentage of UHF subscribers
reflect the quality of the titles released during
purchasing all three services is declining and
the year.
comprised 58.7% of UHF subscribers at 30 June
SKY digital subscribers pay a monthly fee to 2005, down from 64.1% at 30 June 2004.
access a basic tier of channels (see inside back The “sport-only” service was being purchased
cover) and have the option of subscribing by 39.8% of UHF subscribers at 30 June 2005,
to additional services such as a sports tier, up from 34.7% at 30 June 2004. This reflects
movie tier, The Arts Channel, Rialto Channel, that most of the 11,485 UHF subscribers that
digital music channels, a rugby channel and migrated to the satellite platform in the 2005
games channels. year were subscribers purchasing the “Sport
+ Movie” package.
As SKY’s subscriber base grows, the percentage
of digital subscribers purchasing SKY’s premium Although this information on product penetration
package of “Basic + Movie + Sport” is declining, gives an indication of the subscriber trends, we
with these subscribers now representing 47.7% emphasise that we are comparing subscriber mix
of digital subscribers, down from 51.3% at 30 at a particular point in time; there is considerable
June 2004. There is growth in the number of movement across packages during the year.
digital subscribers purchasing the “Basic + Sport”
CHURN
package (from 29.7% to 31.9%) and “Basic +
The range of choices available to subscribers
Movies” package (up from 6.6% to 8.8% of
includes the choice to disconnect SKY if the
digital subscribers). Although this change in
subscription no longer represents value for
subscriber mix does impact average revenue per
money. This is referred to in the industry as
subscriber (“ARPU”), it does not necessarily
“churn”, and it is a measure of the percentage
of subscribers who disconnect their service
either voluntarily or due to a failure to pay their
account. SKY calculates churn on a rolling gross
annual basis, which means each month we
calculate the subscribers who have disconnected
as a percentage of the average subscriber
numbers for that month, and total these monthly
percentages over the last twelve months. As the
following graph illustrates, SKY continues to be
successful in reducing the level of gross churn
on a rolling annual basis:
20 Annual Report June 2005
SKY Sport MGM National Geographic
VALUE
2/,,).' !..5!, '2/33 #(52. For a pay TV company to succeed, it must offer
THE FACT THAT CHURN
“value for money” to its subscribers. One measure
of this “value” is to divide the average cost per
HAS DECLINED WHILE
month to a subscriber, as measured by satellite
THE COST PER HOUR HAS
ARPU, by the average number of hours of SKY
REMAINED UNCHANGED
digital that are viewed each month. In the 2005 SUGGESTS THE SERVICE
year, the cost per hour has remained relatively CONTINUES TO REPRESENT
constant with the 2004 year figure at 53 cents VALUE FOR MONEY.
per hour. While we would like to see this
'ROSS #HURN declining, the fact that churn has declined while
the cost per hour has remained unchanged
suggests the service continues to represent
There is a difference in the level of churn on SKY’s value for money.
digital and UHF platform, shown as follows on a
Another measure of the relative affordability
monthly basis:
of SKY is to construct a “Big Mac Index” for
pay TV services. The following chart indicates
-/.4(,9 #(52. 30,)4 the number of Big Macs it would take to
purchase a full package of pay TV services in
a particular country:
")' -!# ).$%8
.UMBER OF "IG -ACS
*5, !5' 3%0 /#4 ./6 $%# *!. &%" -!2 !02 -!9 *5.
$IGITAL $IGITAL 5(& 5(&
This graph illustrates that there is no longer a
spike in churn in summer months, which did
&/84%, 3+946 $)2%#46 "3+9"
occur in earlier years when SKY’s pay TV offering !53 .: 53 5+
was based mainly on its exclusive rights to winter
sports codes, especially rugby. The service is now
more balanced, offering sports throughout the
As can be seen from the chart, SKY continues to
year, together with a range of basic channels
have the most affordable offering based on this
that have broad appeal throughout the year (for
measure. In interpreting this table, we recognise
example, The Living Channel, E!, The History
that with New Zealand’s relatively low level of
Channel, Disney and UKTV).
disposable income, SKY needs to be offering a
On a monthly basis, churn was lower in the 2005 more affordable product. SKY’s full package of
year than it had been in the 2004 year. The 2004 pay TV services is also a lot smaller than that
year also suffered from the spike in UHF churn offered in larger markets such as the US, where
that occurred in the period September to January economies of scale are such that companies like
when the rugby world cup was free-to-air and DIRECTV offer more than 200 channels of pay
there was no end-of-season tour by the All Blacks. TV in their premier service offering.
Annual Report June 2005 21Business Overview
AT THE HEART OF SKY’S OPERATIONS IS TECHNOLOGY,
AS IT IS TECHNOLOGY THAT DETERMINES THE PRODUCTS AND
SERVICES THAT CAN BE OFFERED TO SUBSCRIBERS.
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22 Annual Report June 2005FUTURE TECHNOLOGY
WIDESCREEN TV ON ALL CHANNELS
HIGH-DEFINITION TV TO
PROVIDE MORE CLARITY
IPTV (INTERNET PROTOCOL TV)
– INTERNET SERVICES DELIVERED
VIA TV OVER ADSL (ASYMMETRIC
DIGITAL SUBSCRIBER LINE)
VIDEO ON DEMAND
Annual Report June 2005 23Business Overview
AT 30 JUNE 2005, ALMOST 800,000 HOMES HAD BEEN INSTALLED WITH A
SATELLITE DISH, WHICH REPRESENTS APPROXIMATELY 50% OF NEW ZEALAND HOMES.
SATELLITE NETWORK At 30 June 2005, almost 800,000 homes
SKY’s digital satellite network was launched had been installed with a satellite dish,
487
$
INSTALLATION COST
in December 1998 and was one of the first
DTH satellite pay TV platforms in the world.
The competitive dynamics in the New Zealand
marketplace were such that SKY was forced into
which represents approximately 50% of
New Zealand homes.
The average age of SKY digital decoders is
3.8 years old and we have some decoders that
A DECLINE OF 5% moving to a multi-channel platform before its
are now 6.5 years old and still in service.
investment in a UHF network had been fully
The following table provides an age profile of
recovered. The costs of rolling out a satellite
the digital decoders owned by SKY:
DTH platform were significant, both in terms of
the back-office infrastructure required to receive,
encrypt, compress and broadcast a multiple Year Purchased Age Percentage
number of channels, and in terms of the cost of
1999 6 to 7 years 11.4%
the decoders that were individually addressable
2000 5 to 6 years 17.8%
via the satellite and had the capability of two-way
2001 4 to 5 years 24.8%
communication via a dial-up modem and other
2002 3 to 4 years 11.4%
interactive features (impulse pay-per-view, voting,
email, etc). At the outset, digital installations 2003 2 to 3 years 12.8%
were costing over $800 with subscribers 2004 1 to 2 years 8.7%
contributing up to $650 per install. However, 2005 0 to 1 year 13.1%
the NZ dollar cost of satellite installations has 100.0%
steadily declined as the US dollar cost of decoders
and satellite dishes has fallen and the NZ dollar
has appreciated in value. For the 2005 year, SKY continues to depreciate its digital decoders
installation costs had fallen to $487 from $512 for and installation costs over five years. The net
the 2004 year, a decline of 5%, as can be seen in book value of digital decoders (excluding
the following graph: associated equipment) at 30 June 2005 was
$51 million and capitalised satellite installation
#/34 /& $)')4!, ).34!,,
costs was $89 million.
“MY SKY” PERSONAL VIDEO RECORDER (PVR)
SKY commenced development of a PVR during
the year and plans to launch this in December
2005. A PVR represents the latest technology in
satellite television as it gives subscribers the ability
to customise their television viewing experience,
thereby enhancing the value that is received from
their subscription.
&ORECAST
$ECODER -ATERIAL,ABOUR In simple terms, a PVR is a decoder with around
60 hours of video storage capability on a hard
drive. The decoder has two tuners, which means
24 Annual Report June 2005SKY Sport Disney BBC World
a channel can be recorded while another channel events can easily be recorded and watched at a
is watched or two channels can be recorded at time that is convenient. The ability to fast-forward
A PVR REPRESENTS THE
the same time. The decoder also has a quickly through programmes is also valuable,
LATEST TECHNOLOGY IN
60-minute buffer, so that whatever is being as is the ability to pause live television. With two
SATELLITE TELEVISION
watched is also being recorded which creates the tuners and integration to the EPG, subscribers
ability for a subscriber to pause live television, are able to record and watch more of the
AS IT GIVES SUBSCRIBERS
rewind if necessary to watch something that programmes that are available on a multi-channel
THE ABILITY TO CUSTOMISE
might have been missed, and then to forward pay TV platform, which enhances the value of
THEIR TELEVISION VIEWING
again to the live programme. This feature is their monthly subscription. EXPERIENCE, THEREBY
particularly popular amongst sports fans, who ENHANCING THE VALUE
SKY will offer the PVR to subscribers for an THAT IS RECEIVED FROM
can create their own slow-motion replays of
upfront installation fee that will offset the THEIR SUBSCRIPTION.
events, or pause a live game while answering
additional cost of this more advanced decoder.
the telephone, etc.
SKY will retain ownership of the decoder and
Another feature of the PVR is that it will be there are currently no plans for an additional
integrated with SKY’s electronic programme monthly subscription.
guide (“EPG”) which enables programmes to
TELEVISION STATION UPGRADE
be recorded at the push of a button, without
SKY currently operates a 15-year-old television
having to set start and finish times. A particularly
station that utilises tape-based analogue
popular feature is the “series line” recording
technology. The station has been developed on
capability where, at the push of a button, all
an incremental basis, with additional capacity
future occurrences of the chosen programme will
being linked as new channels have been added
be recorded to the hard drive.
to the service. The work practices that have
The PVR is very simple to operate and has the evolved from the unique configuration of assets
ability to fast-forward and rewind quickly through are inefficient and the equipment is no longer
content, in a way that is similar to the operation reliable due to its age.
of a DVD recorder. SKY’s PVR will not have the
capability to “skip” ad breaks in their entirety,
as can be done with some hard-drive decoders.
The hard-drive storage device in the decoder
can also be utilised to purchase pay-per-view
movies – movies can be downloaded to decoders
and watched by the subscriber at a time that
is convenient. Movies will be deleted off the
PVR after a period of time, making room for
new movies.
PVRs have already been launched in the US, UK
and Australia. SKY’s PVR is very similar to the
PVR launched by Foxtel in Australia in February
2005. International experience suggests the
value to subscribers of a PVR is that they are no
longer forced into watching live television at a
time prescribed on a particular channel. Instead,
SKY 1
Annual Report June 2005 25Business Overview
THE TIMING OF THE UPGRADE OF THE TELEVISION STATION
IS FORTUITOUS, AS BROADCAST ENTITIES ARE NOW MOVING TO
FILE-BASED INFORMATION TECHNOLOGY INFRASTRUCTURE.
The timing of the upgrade of the television SKY has committed to lease five transponders
3 YEAR
station is fortuitous, as broadcast entities for up to 15 years on a new satellite, known as
around the world are now moving to file-based D1, that is to be launched by Optus to replace
information technology infrastructure. This B1. The D1 satellite is being constructed by
will radically change how content is created, Orbital Sciences of the US and is scheduled to
IMPLEMENTATION PLAN transported, distributed and stored at SKY and be launched by June 2006. SKY has an option to
TO UPGRADE
TELEVISION STATION will provide a number of operational efficiencies lease two additional transponders on this satellite.
for the business. The new television station will
A back-up satellite is also under construction by
be constructed over two sites and will provide for
Orbital Sciences, known as D1R, and this satellite
redundancy should services be lost at either site.
is scheduled to be launched in November 2006,
The project will take three years to implement should there be a failure during the launch of the
and is estimated to cost in the order of D1 satellite.
$50 million. Detailed design of the station is
Optus have also agreed to launch a second
currently under way.
satellite for SKY as an in-orbit back-up to D1.
SATELLITE REPLACEMENT This second satellite, known as D2, will be
SKY currently leases four 54 MHz transponders launched at 156° east in 2007 and will provide
on the Optus B1 satellite. Each transponder has SKY with back-up for the transponders leased on
sufficient bandwidth to carry approximately D1. In order to avoid the requirement to turn
16 channels of video content. This satellite every subscriber’s satellite dish to the 156° east
was launched in 1992 and is projected to position to receive a signal from this back-up
have sufficient fuel to be able to maintain its satellite, SKY is now installing dual low-noise
geostationary local at 160° east until early 2007. block converters (“LNBs”) on each new
installation and during any “trouble calls”.
These LNBs have the capability of automatically
switching to the 156° east position, which
eliminates the need for a dish turn. These LNBs
cost an additional $18 compared to the
traditional LNB but the cost is justified on the
basis of providing an automatic back-up solution
should the primary satellite at 160° east ever fail.
Nickelodeon
26 Annual Report June 2005Animal Planet SKY 1 UKTV
CAPITAL INVESTMENT
As SKY’s business and subscriber base have continued to grow, so has the requirement to invest capital
AS SKY’S BUSINESS AND
in decoders and installation costs. SKY’s total capital expenditure on fixed and intangible assets over
SUBSCRIBER BASE HAVE
the last five years is as follows:
CONTINUED TO GROW, SO
HAS THE REQUIREMENT
2005 2004 2003 2002 2001
TO INVEST CAPITAL
($ millions) IN DECODERS AND
Satellite transponder lease 2.4 – 19.7 17.5 – INSTALLATION COSTS.
Subscriber equipment:
Decoders, smartcards and associated
equipment 21.6 14.5 31.1 38.5 75.6
Installation costs 36.6 38.2 43.3 47.2 55.1
Digital expansion 0.8 2.2 1.5 2.0 11.4
Building 5.4 – – – –
PVR project 5.5 – – – –
Studio upgrade 0.5 – – – –
Interactive applications – 0.2 0.7 3.0 2.0
Renewal rights – – 7.6 10.7 4.8
Other 3.2 2.3 1.9 4.5 4.4
Total capital expenditure $76.0 $57.4 $105.8 $123.4 $153.3
The $18.6 million increase in capital expenditure in the 2005 year is primarily a result of investing
in the PVR project ($5.5 million), leasehold improvements on the new building at Leonard Rd
($5.4 million) and an additional $7.1 million on decoders as a result of increased purchases – there
was a net increase in stock levels during the 2005 year, compared to a decrease in the 2004 year.
Annual Report June 2005 27Business Overview
SKY OPERATES A 24 X 7 BUSINESS AND NEEDS TO SUPPORT THE
REQUIREMENTS OF 619,168 SUBSCRIBERS. DURING THE 2005 YEAR,
SKY’S CALL CENTRE RECEIVED 2.2 MILLION CALLS FROM THESE SUBSCRIBERS.
SERVICE
The demands on SKY’s staff never stop, whether Most of the increase in staffing has been in the
591
it’s programming staff who acquire and schedule call centre, where SKY has consciously sought to
content that subscribers want to see; installers improve customer response times. The increase
who connect new subscribers or make trouble in resource has paid off, with call answer rates
calls to existing subscribers; broadcast engineers increasing from 87% to 95% and average
FULL-TIME EMPLOYEES who ensure the television station is operational response times improving to 35 seconds from
AN INCREASE OF 31
DURING THE 2005 YEAR and “on-air” 24x7; or call centre staff who provide 93 seconds in the 2004 year. Average call
the interface between SKY and its customers. duration has declined from 209 seconds in the
2004 year to 207 seconds in the 2005 year.
SKY prides itself on having a culture that is based
on a young “can-do” attitude where everyone Staff turnover increased slightly in the 2005 year,
gets involved in and has fun in delivering a as follows:
great product. The company has retained the
entrepreneurial flair that was needed to develop
34!&& 452./6%2
a $2 billion business from scratch and continues
to feel like it is being run by a hard-working
owner-operator who carefully scrutinises every
dollar that is spent.
STAFF
SKY has increased the number of full-time
equivalent employees by 31 during the
2005 year, bringing the total to 591.
&INANCIAL 9EAR
&5,, 4)-% %15)6!,%.4 34!&&
Turnover remains highest in Advertising
and Customer Services, areas where it is not
uncommon to experience a higher level of staff
turnover. The increase in turnover can also be
explained by a buoyant labour market and the
ease with which employees can change jobs to
pursue new opportunities.
&INANCIAL 9EAR
28 Annual Report June 200529
Business Overview
SKY ENCOURAGES STAFF TO EXPAND THEIR SKILLS
BY MOVING TO NEW ROLES IN THE ORGANISATION.
SKY has a policy of advertising all vacancies Transferring subscribers are those moving home
internally before externally advertising these who require to be installed at their new premises;
217,085
SUBSCRIBERS ACTIVATED
positions and encourages staff to expand their
skills by moving to new roles in the organisation.
The percentage of vacancies filled by internal
candidates over the last few years has been
although if the new home is already installed this
means the installation can simply be reconnected
to a decoder. Migrants are UHF subscribers
transferring to the digital service.
IN THE 2005 YEAR as follows:
SKY utilises both internal resources and contract
labour to manage these activities. The nation-
).4%2.!, 42!.3&%23 wide weighted average labour and material cost
for a satellite installation (excluding decoder) was
$230 in the 2005 year and this varies around the
country. SKY directly employs 23 installers who
operate solely in the Auckland market.
TROUBLE CALLS
The reliability of SKY’s distribution network is
reflected in the percentage of trouble calls each
year. This has continued to decline in the 2005
&INANCIAL 9EAR
year, with trouble calls as a percentage of the
subscriber base falling to an average of
ACTIVATIONS 1.39% per month from 1.56% per month in
In the 2005 year, SKY activated 217,085 the 2004 year. This represents approximately
subscribers as follows: 90,000 trouble calls in the 2005 year.
!#4)6!4)/.3
S
&INANCIAL 9EAR
.EW 3UBSCRIBERS 4RANSFERS -IGRANTS
30 Annual Report June 200531
Business Overview
FINANCIAL
SKY HAS BEEN ABLE TO SIGNIFICANTLY IMPROVE ON LAST YEAR’S NET PROFIT OF
$35.3 MILLION BY REPORTING A NET PROFIT OF $103.4 MILLION FOR THE 2005
YEAR. FURTHER ANALYSIS OF THIS RESULT IS PROVIDED BELOW.
REVENUE ANALYSIS
SKY revenue has increased by 11.1%
UP
11.1%
to $489.4 million, as follows:
2005 2004 %Inc
($ millions) ($ millions) (Dec)
Subscription revenue:
REVENUE INCREASE Residential 387.0 346.7 11.6
IN THE JUNE 2005 YEAR
Commercial 27.9 25.4 9.8
SkyWatch 9.0 8.1 11.1
Total subscription revenue 423.9 380.2 11.5
Other revenue:
Advertising 35.6 26.6 33.8
Installation, programme sales and other 29.9 33.8 (11.5)
Total other revenue 65.5 60.4 8.4
Total revenue $489.4 $440.6 11.1%
Subscription revenue increased by 11.5%, The following table outlines SKY’s ARPU over
reflecting a 7.4% increase in subscribers, an the last five years, calculated on a rolling
average 4.5% price increase implemented in June monthly basis:
2004 and the net impact of a change in the mix
of services purchased by subscribers. 4/4!, !205
Residential subscription revenue: some analysts
look at revenue in terms of the average revenue
earned per month per subscriber, or “ARPU”.
This approach can be misleading, because it
does not recognise the differing costs that attach
to different types of subscribers. For example,
SKY earns less revenue (ARPU) from TelstraClear
under its retransmission agreement, simply
because TelstraClear provides the capital to install
&INANCIAL 9EAR
these subscribers, operates its own network
and manages all aspects of customer service.
However, this does not mean these subscribers SKY’s total ARPU increased by 4.2% from $54.55
are less “profitable”, as clearly the costs to SKY to $56.86 in the 2005 year. Satellite ARPU
of installing and servicing these subscribers are increased by 1.9% from $61.33 to $62.49,
also lower. In other words, the mix of subscribers reflecting the effect of the price increase,
determines the level of ARPU. Therefore, ARPU partially offset by a reduction in the percentage
itself may not reflect the level of profitability of of subscribers purchasing the higher-priced sport
these subscribers. and movie packages. Wholesale ARPU has
32 Annual Report June 2005Rialto Channel Animal Planet SKY Sport
Advertising sales have had another record year
!205
increasing by 33.8% to $35.6 million. We are
WE ARE CONTINUING
continuing to benefit from greater viewership
TO BENEFIT FROM
on SKY channels and advertisers recognising the
GREATER VIEWERSHIP
value of being able to niche market to specific
ON SKY CHANNELS AND
audiences on SKY. Advertising was not inserted
on any additional channels during the year so
ADVERTISERS RECOGNISING
the increase in revenue has been as a result of
THE VALUE OF BEING
increased yields. SKY is inserting advertisements
ABLE TO NICHE MARKET
3ATELLITE 5(& 7HOLESALE
on a total of 18 channels. TO SPECIFIC AUDIENCES
ON SKY.
SKY’s advertising revenue represents
(1)
approximately 5% of the total New Zealand
increased by 10.5% from $41.86 to $46.27, television advertising revenue for this period,
reflecting an increasing number of subscribers (2)
which is below the 20% share of viewing on
on the resale agreement with Telecom relative to SKY. Similar trends are seen in other markets
the TelstraClear retransmission agreement where where pay TV businesses are unable to attract
the discounts are larger (due to TelstraClear’s their share of the television advertising spend
utilisation of its own distribution network). due primarily to the fractured nature of this
UHF ARPU decreased by 3.1% to $39.42. viewing across a number of channels and fewer
This reflects a decline in the percentage of commercial breaks.
UHF subscribers purchasing the higher-priced
“Sport + Movie” package as these subscribers
migrate to the satellite platform.
Commercial subscription revenue: the commercial
business continues to perform strongly with
revenue up by 9.8%. An increasing number
of commercial subscribers are switching from
UHF to SKY’s satellite service and, as a result, are
purchasing more of the services that are available
on this platform.
SkyWatch is SKY’s monthly programme guide.
Revenue from the guide increased by 11.1%
to $9.0 million in the 2005 year. There were
357,025 residential subscriptions to the guide
at 30 June 2005, a growth of 10.7% for the year.
The penetration of the guide has increased from
60.6% to 62.4% of residential subscribers.
(1) Source: PricewaterhouseCoopers / Television Industry Survey
(2) Source: Nielsen Media Research / All viewers 5+
Annual Report June 2005 33Business Overview
PROGRAMMING EXPENSES HAVE REDUCED
TO 36.3% OF REVENUE, FROM 39.9% THE PREVIOUS YEAR.
Installation revenue is the revenue received from Other revenue is revenue received from satellite
$
99
INSTALLATION RATE
subscribers who are charged an initial installation
fee for subscribing to the UHF or digital service.
Installation revenue is also received from Telecom
under the reseller agreement. SKY’s accounting
dish sales, rental to third parties of transponder
capacity and production revenue for programmes
sold to third parties.
As our subscriber base increases, it is possible
FOR NEW DIGITAL policy is to recognise this revenue as income
that the quality of subscribers could decline. To
SUBSCRIBERS when it is charged. The current listed installation
avoid this, SKY maintains an active approach to
rate for new UHF subscribers is $50 (including
managing debtors. Bad and doubtful debts as a
GST), while the rate for new digital subscribers
percentage of revenue have declined from 0.4%
is $99 (including GST). From time to time, the
to 0.06% primarily as a result of reducing SKY’s
digital and UHF installation rates are reduced to
doubtful debt provision to reflect the low levels
attract new subscribers.
of bad debts currently being experienced. The
Programme sales revenue is the revenue received net bad debt expense for the June 2005 year was
from selling the replay rights of certain sporting $1.3 million compared to $1.4 million for the
events to the free-to-air networks. In the 2005 June 2004 year.
year, TV3 purchased the right to replay certain
A policy of billing subscribers in advance for
rugby games and Prime purchased the rights to
their services, maintaining a credit limit on
replay certain NRL rugby league games and
pay-per-view purchases, establishing an upfront
New Zealand cricket.
cost to subscription through the installation fee
and encouraging subscribers to utilise direct debit
as a form of payment, all assist in minimising bad
debt levels.
34 SKY Box
Annual OffiJune
Report ce 2005The Living Channel Rialto Channel SKY 1
EXPENSE ANALYSIS
A further breakdown of SKY’s expenses is provided below:
2005 2005 2004 2004
($ millions) % of revenue ($ millions) % of revenue % Inc/(Dec)
Programming 177.6 36.3 175.8 39.9 1.0
Subscriber management 18.1 3.7 17.6 4.0 2.8
Transmission 7.1 1.5 7.0 1.6 1.4
Selling, general and administrative:
Realised and unrealised foreign exchange 1.6 0.3 2.2 0.5 (27.3)
Other selling, general and administrative expenses 56.6 11.6 52.5 11.9 7.8
Selling, general and administrative - total 58.2 11.9 54.7 12.4 6.4
Depreciation and amortisation 119.3 24.4 128.1 29.1 (6.9)
Total operating expenses $380.3 77.8% $383.2 87.0% (0.8%)
Programming expenses have reduced to 36.3%
of revenue, from 39.9% the previous year. BAD AND DOUBTFUL DEBTS
Programming costs are made up of the following:
AS A PERCENTAGE OF
REVENUE HAVE DECLINED
2005 2004 FROM 0.4% TO 0.06%
($ millions) ($ millions)
PRIMARILY AS A RESULT
OF REDUCING SKY’S
Rights 138.5 137.4 DOUBTFUL DEBT PROVISION
Production 22.2 20.9 TO REFLECT THE LOW LEVELS
Other 16.9 17.5 OF BAD DEBTS CURRENTLY
Total $177.6 $175.8 BEING EXPERIENCED.
The bulk of programming costs relate to
purchasing programme rights, including the
cost of sports content, pass-through channels,
movies (including pay-per-view) and music rights.
Production expenditure includes the costs of
producing live sporting events, in-house shows
(such as Sport 365, Reunion, Try Time, etc) and
taping, formatting, editing and adding other
features to programmes. Other expenditure
includes administration and satellite linking costs
for bringing in live events.
Annual Report June 2005 35Business Overview
THE SIGNIFICANT REDUCTION IN INTEREST COSTS REFLECTS
THE DECLINE IN BANK DEBT FROM $46 MILLION AT 30 JUNE 2004,
TO A NET CASH POSITIVE POSITION AT 30 JUNE 2005.
A significant proportion of SKY’s programme locations, using a digital microwave and optical
A SIGNIFICANT rights costs is in US dollars. That means the fibre distribution network. They also include
PROPORTION OF SKY’S NZ dollar cost included in SKY’s accounts is the cost of broadcasting the signals from BCL’s
PROGRAMME RIGHTS partly determined by the strength of the NZ television towers throughout New Zealand.
COSTS IS IN US DOLLARS dollar during a particular year and by SKY’s Payments to BCL for transmission services are
hedging policy. based on revenue generated from SKY’s UHF
network, subject to minimum and maximum
The board’s policy is to hedge a minimum of
annual payments, whereas payments for linking
85% of the forecast exposures over 0 to 12
are predominantly fixed.
months and 25% to 45% of variable exposures
over 13 to 36 months. Fixed-price contracts Selling, general and administrative expenses
denominated in foreign currencies are at least consist of marketing costs, including overheads
70% hedged for a minimum of 36 months from and the costs of producing advertisements
the time they are entered into. promoting SKY products, selling advertising
and sponsorship on SKY, and production of the
In the 2005 year, SKY made US dollar operating
SkyWatch programming guide. General and
payments at an average exchange rate of 58.0
administrative costs include such overheads as
cents. Based on the 2005 year results, each 1 cent
corporate management, the finance department,
movement in the US/NZ rate would have affected
the information technology department and the
operating costs by around NZ$1.7 million. At the
costs of collecting from subscribers including
same time, capital costs would have changed by
bad debts. Also grouped here are realised foreign
around NZ$0.4 million.
exchange gains and losses not attributed to
In the 2005 year, SKY’s total rights costs of programming expenditure and all unrealised
NZ$138.5 million included approximately foreign exchange gains and losses. The total of
US$56.6 million of rights costs. these costs increased by $3.5 million in the
2005 year to $58.2 million (a 6.4% increase).
Subscriber management costs include the cost
This was primarily as a result of increases in
of servicing and monitoring equipment installed
advertising costs (agency commission and
at subscribers’ homes, a portion of the overhead
employee costs, commensurate with increased
costs of SKY’s customer service department and
advertising revenue), corporate overheads and
general administrative costs associated with
the costs of DVD Unlimited (SKY’s new on-line
SKY’s eleven regional offices. They do not include
DVD rental business), offset by reductions in the
installation costs as these are capitalised and
bad debt expense due to the partial write-back of
amortised on a straight-line basis over a five-year
the doubtful debt provision.
period. Subscriber management costs increased
by $0.5 million to $18.1 million (a 2.8% increase) Depreciation and amortisation include
– higher customer service costs were partially depreciation charges for subscriber equipment,
offset by overhead capitalisation and warehouse including satellite dishes, decoders and aerials,
costs decreased due to a reduction in the number all owned by SKY, as well as for installation
of decoders repaired during the year. costs. This also includes depreciation of the
transponders leased on the Optus satellite and
Transmission costs consist of transmission and
fixed assets such as the studios, facilities and UHF
linking paid to Broadcast Communications
transmission equipment.
Limited (“BCL”) for transmitting SKY’s UHF
signals from its studios in Auckland to other
36 Annual Report June 2005The Living Channel BBC World National Geographic
Interest and financing charges include interest tax payable for the 2005 year. As a result, INL
on the bank loan; interest on the capital notes was not required to fund this tax payment. The
(both inclusive of interest received or paid on remaining $1.8 million of the accrual is a result
SKY HAS RECOGNISED A
swaps) and also the amortisation of capital notes of a shortfall in SKY’s estimate of its tax liability
TAX CREDIT OF $9.6 MILLION
issue costs; and bank commitment and facility for June 2005.
IN ITS 2005 ACCOUNTS,
fees. The weighted average interest rates for the REPRESENTING THE IMPACT
Tax Loss Agreement with INL OF RECOGNISING DEFERRED
relevant years are as follows:
SKY and its 78% shareholder, INL, agreed that TAX ASSETS (ON TIMING
INL would utilise certain income tax losses DIFFERENCES) FOR THE
2005 2004 incurred by SKY from 1 July 2001. INL agreed to FIRST TIME.
pay SKY the “value” of any losses that were offset.
Bank loans 7.3% 6.9%
As at 30 June 2004, losses totalling $101.8 million
Capital notes 9.5% 8.8% (with a value of $33.6 million) had been offset
Combined weighted average 9.3% 7.9% by way of notification to Inland Revenue. During
the 2005 year, SKY received $22.1 million of
compensation from INL for utilisation of these
Finance lease interest relating to the four Optus
losses and this was paid to the Inland Revenue
transponders is also included in interest expense
as 2005 provisional tax. At 30 June 2005, $9.7
and is being expensed over the remaining
million of the $11.4 million still due to SKY under
estimated life of the satellite lease.
the agreement had been accrued, with the $11.4
The significant reduction in interest costs reflects million being paid to SKY on 1 July 2005 under
the decline in bank debt from $46 million at the terms of the merger agreement with INL.
30 June 2004 to being in a net cash positive
position at year-end, and the continued
reduction in the principal outstanding under
the Optus finance lease.
Taxation expense: SKY has recognised a tax credit
of $9.6 million in its 2005 accounts, representing
the impact of recognising deferred tax assets (on
timing differences) for the first time. Tax expense
on the profit for the year has been offset by a
tax credit for payments that were received from
INL under the tax loss agreement (refer below),
as well as being offset by a $9.7 million tax loss
reimbursement accrual.
The accrual of $9.7 million due to SKY under
the tax loss agreement resulted from the
election of INL to be an LE3 Holding company
for tax purposes and the resulting payment of a
supplementary dividend of $7.9 million in March
2005. This dividend was paid by SKY and will
be recovered as a deduction against the income
SKY 1
Annual Report June 2005 37Board of Directors
PETER MACOURT ROBERT BRYDEN MARKO BOGOIEVSKI
Chairman Deputy Chairman Director
Mr Macourt was appointed as Mr Bryden was appointed a Mr Bogoievski was appointed a
chairman of the board of SKY director in 1990 of SKY and deputy director of SKY in February 2001.
in August 2002. He is currently chairman in February 2001. He has been the chief financial
chief operating officer of News He is the managing director of officer of Telecom Corporation of
Limited based in Sydney, Australia. Todd Capital Limited. He is also a New Zealand since May 2000.
Mr Macourt joined News Limited director of Crown Castle Australia Prior to this appointment,
in 1983. He was appointed as its Pty Limited, Crown Castle Mr Bogoievski held a number
deputy chief executive in 1998 Holdings Australia Pty Limited, of senior financial, operational
and to his current position at Woosh Wireless Limited and and sales roles in New Zealand
News Limited in July 2001. Metlifecare Limited, the largest and the United States with
Mr Macourt is a director of News retirement village operator in various organisations including
Limited and other subsidiaries of New Zealand. PricewaterhouseCoopers, Lion
The News Corporation Limited, Mr Bryden holds a BCA from Nathan and Ansett.
Fox Studios Australia Pty Limited, Victoria University of Wellington. Mr Bogoievski graduated from
Foxtel Management Pty Limited Victoria University of Wellington
and Premier Media Group with a BCA majoring in economics
Pty Limited. and accounting. He also has an
He holds a degree in commerce MBA from the Harvard Graduate
from the University of New School of Business.
South Wales.
38 Annual Report June 2005ALBERT (BARRIE) DOWNEY JOHN FELLET MICHAEL MILLER JOHN HART
Director Director and Chief Executive Director Director
Mr Downey has been a director of Mr Fellet joined SKY as chief Mr Miller was appointed a director Mr Hart was appointed a
SKY since 1991. He was chairman operating officer in 1991. He was of SKY in September 2004. director in SKY in October 1997.
from 1991 to 1997. appointed as chief executive in He was also the coach of the
He is currently the managing
January 2001 and as a director All Blacks and an international
Mr Downey has spent most of director of Advertiser Newspapers
of SKY in April 2001. rugby selector.
his working career in the Fletcher Pty Limited (a division of News
Challenge Group where he Mr Fellet holds a BA degree in Limited). Joining News Limited Mr Hart was employed by Fletcher
became executive director in Accounting from Arizona State in 1991, he was most recently Challenge Limited from 1966
1988. He was awarded the CBE University, United States and News Limited’s Group Marketing to 1995 in a variety of positions
and is a Fellow of the Institute has 25 years’ experience in Director for eight years. including employee relations
of Chartered Accountants of the pay TV industry, including director. He currently manages
Mr Miller is a director of the
New Zealand and New Zealand ten years’ experience with Tele his own consultancy business.
International Newspaper
Institute of Forestry. Communications Inc. in the Marketing Association, Rugby
United States. International Pty Limited, Fox
Sports Australia and Premier
Media Group Pty Limited.
He has a degree in applied
science in communications from
the University of Technology
in Sydney.
Annual Report June 2005 39You can also read
