TVNZ digital deal bad news for Sky's rival

By SIMON HENDERY

Sky Network Television's new deal to carry TVNZ's two channels on its digital platform is expected to provide another small competitive stumbling block in the pay TV market.

Digital television commentator Bob Cooper said the deal was likely to have a small negative impact on cable-based rival pay TV operator TelstraSaturn.

TelstraSaturn, which has customers in Wellington and Christchurch and plans to expand into Auckland, already offers TVNZ's channels on its platform.

Mr Cooper said yesterday's deal between Sky and TVNZ meant viewers tossing up between Sky and TelstraSaturn were now being tempted with a more attractive offering on the Sky platform.

The deal also helped cement Sky's dominant position in the pay TV market. By the end of June it had 430,000 subscribers, including 162,000 digital customers.



Sky's chief executive, John Fellet, said the addition of TV One and TV2 would boost subscriber demand for the network's digital service.

However, the deal failed to excite investors. Sky shares closed down 5c yesterday, at $3.45.

TVNZ chief executive Rick Ellis said he expected the Sky deal would have a positive impact on TVNZ's value because "digital homes" were being included in ratings and if TVNZ was not broadcasting digitally that would ultimately affect ratings and revenues.

"Being on that platform, I've no doubt it will enhance the value of the company," he told Parliament's finance and expenditure select committee yesterday.