From next month, Sky basic will be replaced with two new packages called Sky Starter - the new minimum package with a smaller number of channels at a cost of $24.91 per month, and Sky Entertainment featuring several other channels for $25 per month.
Sky's sports content is accessible either through the Sky sport package, which can currently be tagged onto the basic package for an additional $30 (Sky also offers a Platinum Sport package for $38.71).
Existing customers could change their package, and those that go for the Starter and either Entertainment package would receive SoHo free.
"The board and management believe this new pricing structure will assist in attracting new customers by offering a cheaper entry point for customers who do not want the full Sky package," the company said.
The new pricing would likely encourage current subscribers to drop to the new package, thereby reducing Sky's average revenue per user but would help retain customer numbers.
Sky Television chief executive John Fellet. Photo/Jason Oxenham
In the 2017 financial year Sky lost 28,000 subscribers, who had cancelled their subscriptions during the year.
The new pricing comes at a time when Sky is facing strong competition in the entertainment space from Streaming Video On Demand (SVOD) providers, particularly Netflix which has spread quickly from being a niche player to now reaching 1.2 million New Zealanders, according to Nielsen figures.
Netflix's low entry cost, its breadth of content and the rapidly increasing internet speeds in New Zealand have all conspired to put enormous pressure on the paid TV model in New Zealand.
Sport has, however, remained an area of strength for Sky, with the broadcaster having locked down the rights for New Zealand's tier one sports for a number of years.
