KEY POINTS:
Sky Network Television
Uncertainly over how the digital TV market will pan out has resulted in Sky TV shares being volatile in recent months. This month has seen the introduction of Freeview, the digital service that is going to be added to the free-to-air channels. Sky has a powerful advantage in that it is already in 600,000 homes but the new competition could confuse the market sufficiently to stop new subscribers approaching Sky. Nevertheless, Sky is proactive with more than a few tricks up its sleeve, which could limit the damage. The main trouble with Sky is that its shares are expensive, trading on a high p:e ratio, which means they fall hard in the event of setback.
Publishing & Broadcasting
PBL has announced plans to break up into separate media and gambling businesses. This bombshell comes just a few months after PBL raised A$4.25 billion by transferring its media businesses to a new company in which private equity firm CVC Asia Pacific holds a 50 per cent stake. These moves suggest CEO and major shareholder James Packer has less enthusiasm for media assets than his late father. Casinos are more reliable earners while print publications are rapidly losing eyeballs and advertising dollars to the internet. PBL now has the resources to expand in hot spots like Macau, where potential is enormous and Packer junior is showing signs of having the same competencies as his dad.
* Views expressed in this article are those of IRG, not the Weekend Herald
