How likely that Sky abolishes HD subs?

[Keenwatcher]

I have been told by an authorised dealer, who claims insider info, that Sky will cut the subscription just before and for Christmas, (not as a present for us, but to exite the market).

He claims that it will be a repeat of the Sky plus move, ie, not charging the sub if you take the top package.

I know there are some word couplets such as, mill - rumour, pigs - fly, figure - go, but I wonder if the same conditions prevail as for the Sky plus situation, something like we've sold a good few, let's now sell loads.

 

[Abbeygoo]

I think that Sky+ is an encouraging precedent. The £10 per month subs has been removed for a while and I expect that this will be the case for SkyHD.

I can then invest £10 per month into some more HD-DVDs

 

[CaffeineJunkie]

I'd like this to be true. I'll be one of the first to jump for joy when it happens, but this isn't the same as the sky+ charge.

We're paying for extra channels, which has an ongoing cost associated with it, both in terms of satelite bandwidth, and fees to the content producers. There also has to be a profit margin as well. Thats just the real world for you.

They never dropped the premium for the sports channels, or the movie channels so why the HD channels?

Ultimately, if they drop the charge then the revenue stream (approximately £3 million a month) will have to come from somewhere else. That means the rest of the SD subscribers will be subsidising our HD channels for us.

The sky+ charge was different. There is no ongoing cost associated with it other than software development. According to someone on the Sky+ team they wanted to ditch the monthly charge on that earlier but software development was costing a fortune. Anyone who's ever worked on a software project knows just how expensive they can be.

 

[WATTS]

Well i cant see it myself but lets say they did. I can guarantee it will shock every single member on here and it will be one less thing to moan about with Sky.

c'mon Sky, prove me wrong and do something different i dare you!

 

[Keenwatcher]

Caffeine Junkie said,
"We're paying for extra channels, which has an ongoing cost associated with it.

Yes, I suspect you're right,thinking further about it, it's more likely that subs would go up!
Gloomy ? maybe not, in the US one provider has promised "100 HD channels by Christmas" as part of it's promotional drive though I believe they indulge in more pay per view with promos like 'Sunday ticket' for nineteen bucks.

Perhaps more PPV events here would be seen as the route to enlarge the content offered.

 

[mitchec1]

Subs wouldn't go up by £20 a month though which is what the missus is paying for 2 HD boxes.

Sky could start by dropping the 2nd sub.

It would be nice if they'd drop both but I can't see it happening for a while yet hopefully I'm wrong though

 

[mkcurtis]

I agree with most of the comments here. Why would they put down the price of HD subs. They have not with Movies or Sports. In fact those keep going up. If you want premium content you pay premium price. Truth is, they know those that have paid £300 for a HD box and £1Kish for a TV will pay £10 to use it. There is actually an advert on TV now reminding those that have a HD ready TV that it is "waiting and waiting and waiting" for a HD feed and telling people to buy a HD box. Seems like a big push to pick up sub numbers if you ask me.

They Sky+ platform is not an on going cost for sky, they did the dev. work, put it out there and it works. We want more HD content, which requires more bandwidth which costs more so I can only see it going up to be honest unless they get more subs. Not to mention competition from others, setanta, Virgin, mobile operators soon to offer their own unique content via IPTV

However, ill be very happy to be wrong!

 

[CaffeineJunkie]

I will say that I can see them dropping the multiple HD subs for multiroom.
Thats a pointless charge which just seems to alienate their customers.

 

[mkcurtis]

That would be nice, you get your full package for the £10 Multiroom and the extra £10 again for those few HD channels is not on. Esp. as some people have paid an addition £300 for the 2nd box!

 

[Scapegoat]

At some point in the future all TV will be HD and therefore it won't be a premium product. There must be a cross-over point where the costs are absorbed into the standard product (though I think you can still buy a B&W TV licence - so perhaps the cross over point is a long long way off).

But HD is a long way off, so I'm not expecting a bold move to drop the sub for a year or 2 yet (at least until after a freeview version of HD is out).

In terms of bandwidth why can't Sky just broadcast one version of a HD channel? If I have Sky One HD on, but watch it off the RF outlet I can still see it. Also if I connect the HD box via SCART I can still see a SD version on the main TV.

So why broadcast 2 versions? Let standard boxes view the HD channel but output SD. This would save bandwidth and therefore reduce overall costs.

 

[CaffeineJunkie]

Unfortunately the HD versions are compressed using H.264 compression which the original boxes cannot handle.

It's not even just a software upgrade. H.264 uses quite a bit of processing which is part of the reason why the boxes are still expensive.

Also remember that it's not the SD channels bandwidth thats the issue. A good HD channel uses over 5 times the bandwidth of an SD channel

 

[chrise]

One of Sky's main financial key reporting indicators items is ARPU - Average Revenue per User - which increased by £21 to £421 over the last year. Going on their record so far they will only remove the HD charge when they think that will increase that figure overall - ie they can gouge more money out of us through another route.

They will charge the maximum the market will allow - only way to get them to change is by increasing their another of their kpis - the rate of churn - but there is not a lot of competition.

 

[p9ul]

I think its the £10 sub that puts more people off than the £299 price tag, they'd probably get more customers with a £0 sub and £399 price tag... its the increased direct debit that my misses complain the most about...

 

[Starburst]

One of Sky's main financial key reporting indicators items is ARPU - Average Revenue per User - which increased by £21 to £421 over the last year. Going on their record so far they will only remove the HD charge when they think that will increase that figure overall - ie they can gouge more money out of us through another route.

They will charge the maximum the market will allow - only way to get them to change is by increasing their another of their kpis - the rate of churn - but there is not a lot of competition.

The ARPU goes up when they also get rid of people who pay less than average so it's not a great marker for the performance of the platform as such and no doubt SKY ISP revenues would have also boosted the figure despite SKY losing money on that arm of the company.


As with SKY+ it's the market that will "encourage" SKY to incorporate the HD service into existing subscription packages, the quicker the BBC go full time and hopefully Freesat pushes ITV/CH4 etc and of course VM get their act together the quicker SKY subscribers will benefit.

 

[Scapegoat]

Also remember that it's not the SD channels bandwidth thats the issue. A good HD channel uses over 5 times the bandwidth of an SD channel

So getting rid of Movies SD 1 and 2, Sky One SD, History SD, Discovery SD, Nat Geog HD, and two sports channels = 1 HD channel. Oh well.

 

[Scapegoat]

One of Sky's main financial key reporting indicators items is ARPU - Average Revenue per User - which increased by £21 to £421 over the last year. Going on their record so far they will only remove the HD charge when they think that will increase that figure overall - ie they can gouge more money out of us through another route.

I think you are right, but given the number of people who have been willing to drop their package now Sky+ is free I wonder how this recent move achieved this policy.

The questions for Sky are:

1) How many people are currently paying £10 for a HD sub that don't subscribe to Movies and Sport? If they got these people to move up a package by doing this then they'd be OK (not sure of the package costs)

2) How many people on SD sky without the Movies and Sports would then choose to upgrade as they'd see it as getting more for their money?

In addition to ARPU figure, there is the additional advertising revenue they could charge if the viewing figures for Sport channels increased.

3) How many people on the full SD package would then choose to go HD? This is reveune neutral and also advertising neutral, so potentially a cost for Sky (not sure on the profit/loss of the Sky HD box and installation per unit).

Because the big effect of such a change is likely to be from number 3) and theefore not that cost effective its hard to see this happning for a while.

That is why I think it will be the multi-room/HD combined for a £10 fee that comes next. I imagine that there are a lot more people on the SD package without multi-room that would be tempted to give another £10 a month for HD AND mutltiroom and therefore boost the ARPU.

 

[loz]

Sky HD subs are only likely to be dropped when there is some competition providing free HD from another source.

If BBC/ITV/4/5 launch a free satellite service with HD that might prompt Sky to reconsider.

It was probably the widespread availability of low cost DTT PVR boxes that played a part in Sky realising they couldn't go on justifying the £10 sky+ sub when it was free on other systems.

So it will probably require some similar competition to get the Sky HD sub dropped.

 

[loz]

That is why I think it will be the multi-room/HD combined for a £10 fee that comes next. I imagine that there are a lot more people on the SD package without multi-room that would be tempted to give another £10 a month for HD AND mutltiroom and therefore boost the ARPU.

Include me in that camp.
I would like to have HD in 2 rooms. But I am not paying £20 a month for it.
So Sky get nothing from me, whereas I would be happy to pay £10.

 

[colham]

Abolishing for top end customers would be a start. I can't see it just yet.

To be honest, I'd prefer to increase the content and keep the £10 sub, rather than stay the same and reduce the sub.

 

[WATTS]

Include me in that camp.
I would like to have HD in 2 rooms. But I am not paying £20 a month for it.
So Sky get nothing from me, whereas I would be happy to pay £10.

Me too. I would ike another HD box in another room with a HD TV but there is no way i can justify an extra £10 for something thats costing sky no more money to supply me with.

its the same with multiroom, IMHO per household it should be if you want multiroom then the maximum is £10 per family. I have an octo LNB and have sky in both the kids rooms which costs me an extra £20 a month.
Now it costs sky no more money (excluding cost of boxes) to supply a house with say 4 Sky+ boxes as it would 1 Sky+ box. Hence why i think it should be a flat rate multiroom charge per dish (up to an octo LNB) no matter what.

HD subs should (and will eventually) be gone.

I am thinking about cancelling after 12 months because my last months bill was £94 which is way too much money to be giving Sky for their services.

 

[Starburst]

I am thinking about cancelling after 12 months because my last months bill was £94 which is way too much money to be giving Sky for their services.

That is a quite a bill

I expect the one sub for all will be first seen with the server/client system or a month after VM do the same with their additional boxes

 

[Scapegoat]

To be honest, I'd prefer to increase the content and keep the £10 sub, rather than stay the same and reduce the sub.

Actually you are right. I'd me be more than happy to pay the £10 a month for a regular increase in channels.

Give us FX, Living, ITV, Ch 4, E4, BBC (confirmed as a full channel), Eurosport, Setanta, some Music channels, a news channel etc in HD - over the next few years and I'll not complain about the £120 a year cost.

You pay a premium for a colour TV license why not for a HD one? As long as the content supports it.

 

[loz]

Actually you are right. I'd me be more than happy to pay the £10 a month for a regular increase in channels.

Give us FX, Living, BBC (confirmed as a full channel), Eurosport, Setanta, some Music channels, a news channel etc in HD - over the next few years and I'll not complain about the £120 a year cost.

Though many of those are non-Sky channels and not part of any Sky package, so I hope you don't suggest you would be happy to pay Sky to watch them?

We should be getting ITV, Ch 4, E4 in HD without any subscription like BBC HD.

You pay a premium for a colour TV license why not for a HD one? As long as the content supports it.

Please don't go suggesting the BBC should raise the TV licence in order to fund HD....