Sky TV chief executive John Fellet is not losing sleep over Australian pay TV Fetch eyeing a move into New Zealand.
Fellet said Fetch, the second largest pay-TV operator in Australia, had been rumoured to be entering the local market for years, and that the company was used to having competition.
"I never discount any potential competitor but we face competition every day from Lightbox to Netflix and supposedly Amazon or Google," he said. "Fetch is just one of them."
The Australian-based company said it was considering a launch into New Zealand, with chief executive Scott Lorson saying the company would not do things by halves.
"New Zealand is not a market where you can achieve success through half measures. You need to burn the boats," Lorson said.
"Our approach will be to enter the market with the clear intention of being number one, or not enter at all."
Mark Fowler from Hobson Wealth Partners said while this could put further pressure on Sky, it would depend on the content Fetch was offering.
"Content is king. It's one thing for another provider to come through, and if it's substantially cheaper then that could be difficult for Sky, but it does really come back to what content they can offer and how that stacked up," Fowler said.
"Contractually they [Sky] have the rugby until 2020 and bidding rights are coming up for the Olympics too, so there are some major contracts coming up for renegotiation which could be key to them moving forward."
Lorson would not rule out making a bid for the rugby rights - the main drawcard for Kiwi sports fans - although Fellet said it would take a lot to wrangle these from Sky.
"Of the range of people looking at the rugby rights, I don't think that's the one I would be losing sleep over," he said.
"When I did the first rugby deal 25 years ago it was the most contested piece of content, and every year since it has been the most contested piece of content, so it comes with the territory."
The rugby rights could be in contention when they come up for renewal this year. Photo/photosport
He said whoever threw their hat in for the rights would have to be prepared to invest at least $50 million to $60 million on production set up.
According to Fowler the rights could come down to more than just the highest bid.
"Sky have the relationship already, so yes the New Zealand Rugby Union is a commercial operation but you would think it would need to be a considerably better deal on commercial terms for them to [drop Sky]," he said.
"And there would probably need to be some commitment at a deeper level given the importance of New Zealand rugby to the country."
Hamilton Hindin Greene investment advisor Jeremy Sullivan said more competition would put pressure on Sky but as long as they could retain the rugby rights, they had the upper hand.
However, he noted Fetch had the backing to be able to make a serious bid.
"They certainly have the firepower to be able to bid for the rights, but you have to look at the fundamentals and the infrastructure associated with producing it," Sullivan said.
"They would have to hire the commentators, the production crew, the TV cameras, and then there's the contractual stuff so it's quite a big outfit sky has," he said.
"If Sky did lose the rugby rights though... watch out."
