Investor Update

SKY TV
PO Box 9059
Newmarket
Auckland 1149
New Zealand

10 Panorama Road
Mt Wellington
Auckland 1060
New Zealand

T. +64 9 579 9999

sky.co.nz









SKY TELEVISION – INVESTOR UPDATE
26 March 2018


SKY TV is today updating Investors and Analysts on our strategic priorities, and plans to achieve these
priorities. A copy of the presentation is available on the NZX, ASX and SKY websites.

Having undertaken a robust review of our strategy, the objective of the session is to provide the
investor community with more clarity about how SKY is moving forward after the terminated
Vodafone merger, and how we are competing in the increasingly digital content market.

The company’s strategy is based on three key areas: content, customer experience, and a targeted
range of products and price points to suit all customers.

• Telco partnerships
The Vodafone merger had some unique appealing characteristics which cannot be replicated with an
organic entry in the highly competitive broadband market, and SKY does not plan on entering this
market on our own. We will focus on existing and renewed partnerships as we have in the past.

• Exclusive content
Our core focus as a Pay Television operator continues to be to secure exclusive content that matters
to New Zealanders. Sports and Blockbuster Movies remain important, and Premium Drama is now as
relevant as those two Pay TV mainstays.

• Improved customer experience through technology
Content is still King - but it now sits on the throne of products and experiences. SKY is investing in
technology (including the Cisco Infinite Video Platform) to enable us to improve the On Demand
experience for customers.

We are pleased to be partnering with a global player that is supporting over 100 million set top box
customers around the world. It means we can operate like a scaled player and have a features
roadmap for customers that matches what is being offered globally.

This does not mean we will move away from linear channels overnight, because they are currently still
preferred by a large group of good customers, but over time we expect On Demand to grow
significantly at the expense of linear. Our job is to deliver both types of services in ways that our
customers want and need.

To ensure we can continue to serve customers who rely on our satellite-delivered content,
particularly those New Zealanders in rural and other areas without reliable internet access, we intend
to renew the satellite contract this year. Our 100% reach across New Zealand is a competitive
advantage.

• Content discovery
With the growth of On Demand, customer choice increases, and while this is a good thing customers
will need help in discovering the best content for them in an easy manner. Content Discovery and
Data are therefore a key focus for our teams.


• Range of products and price points to suit all customers
We are expanding the range of products and propositions that we offer, ranging from the current
satellite-centric service, to Fibre-based services using lower cost Puck set top boxes, all the way to
being able to access SKY content as an App with no set top box. All of these propositions are being
designed around different customer segments and contain different capabilities, features and price
points.
To improve our ability to get experiences to customers faster and to ensure a sustainable business,
we are embarking on a process of simplifying our operations.


Financial update

We expect to stabilise our core earnings with our recent changes to pricing and by improving the core
experience, and to add incremental profitable customers on “smaller” OTT services. At the same time
we are continuing to focus on managing the cost base through simplification of some existing
processes and operations.

The financial analysis included in the presentation material is for illustrative purposes only and is not
Guidance. There are a lot of variables at play and SKY is yet to fully design and launch all of these new
products. The purpose of the presentation is to highlight the range of options that SKY has, and how
our current satellite platform can transition to include a range of IP/fibre based products at different
price points, with different content propositions and service models.




For further information please contact:

Jason Hollingworth
Chief Financial Officer
SKY Network Television
(09) 579 9999
(021) 312 928

---

INVESTOR DAY
March 26 2018

INTRODUCTION
JOHN FELLET
CEO

STRATEGY
GEORGE MACFARLANE
DIRECTOR OF STRATEGY

SKY DOES NOT NEED TO BECOME A
TELCO TO SUCCEED
▶SCALE
▶BRAND
▶GLOBAL EXPERTISE
▶MOBILE ASSETS

SKY DOES NOT NEED TO BECOME A
TELCO TO SUCCEED
▶SCALE
▶BRAND
▶GLOBAL EXPERTISE
▶MOBILE ASSETS
FIXED LINE MARKET
IS CHALLENGING
▶COMPETITIVE
▶LOW MARGIN
▶LOW BARRIERS TO ENTRY

SKY DOES NOT NEED TO BECOME A
TELCO TO SUCCEED
▶SCALE
▶BRAND
▶GLOBAL EXPERTISE
▶MOBILE ASSETS
FIXED LINE MARKET
IS CHALLENGING
▶COMPETITIVE
▶LOW MARGIN
▶LOW BARRIERS TO ENTRY
PARTNERING MODEL
IS PREFERRED
▶EFFECTIVE DISTRIBUTION
CHANNEL
▶SEGMENTATION EXPERTS
▶NEED RELEVANT PRODUCTS
FROM SKY

PAY TV

OUR STRATEGY
MULTIPLE PROPOSITIONS AND
PRICES
UNDERSTANDING OUR
CUSTOMERS AND DELIVERING
GREAT EXPERIENCES
WORLD CLASS CONTENT THAT
MATTERS
STABILISE CORE
EARNINGS
ADD PROFITABLE
INCREMENTAL
CUSTOMERS
TRANSITION TO
VOD CENTRIC
WORLD

AN UPDATED EXPERIENCE FOR CUSTOMERS
▶LINEAR CENTRIC
▶REQUIRES SATELLITE
▶GRID BASED
▶SKY CONTENT ONLY
▶GLOBAL RECOMMENDATIONS
▶ONDEMAND CENTRIC
▶SATELLITE OR IP BASED
▶IMAGE BASED
▶SKY + 3RD PARTY CONTENT
▶PERSONALISED RECOMMENDATIONS
COMPANION APPS

CISCO IVP GIVES ACCESS TO SCALE AND PUTS SKY AT
FRONT
CISCO – EXPERIENCE GLOBAL ORGANISATION SUPPORTING MILLIONS OF STB’S
SKY ABLE TO MOVE FROM FAST FOLLOWER TO LAUNCHING AT SAME TIME AS OTHER CISCO CUSTOMERS

CONTENT DISCOVERY MATTERS MORE THAN EVER
MORE CONTENT MORE CHOICE MORE WORK
ONDEMAND content puts more
choice in the customer’s hands
at the same time.
The job for pay TV platforms is to
help customers easily find
something good to watch.
Its more than a recommendation
engine.
Data and our understanding of a
customers relationship with
different content will be a
differentiator.

DATA ENABLES PERSONALISED EXPERIENCES
Able to collect viewing from nearly 300k
ST B’s
Helps business decisions but will also
unlock Recommendations and Content
Discovery
Big data can lead to little choices
Relevant personalised experiences will
create differentiation

OUR TECHNOLOGY PLATFORMS WILL LET
US SERVE THE ENTIRE MARKET
CURRENT
OFFER
UPGRADED
STB
IP ONLY
STB
APP ONLY
▶Linear Centric supported
by PVR –DIY ON DEMAND
▶Satellite – No Internet required
▶Grid UI
▶Linear and OnDemandblend with PVR
▶Satellite with some internet required
▶Image based UI
▶Opt In
▶Can support new higher Spec STB
(4k | 3rd Party services)
▶Flexible hardware –Linear and OD
blend or OD led service
▶Fibre delivery (no satellite)
▶Cloud PVR or no PVR
▶Image based UI
▶ONDEMAND led
▶No STB
▶OTT Delivery
SATELLITE
RENEWAL ▶HIGH
RESILIENCE FOR
“SLOW” INTERNET
CUSTOMERS
EXTEND
USEFULNESS OF
RECENT STB
PURCHASES
LOW COST STB AND
INSTALL
ABLE TO TARGET
OTHER “NON
TRADITIONAL”
SEGMENTS

WITH PRICING PLAYING A KEY PART OF THE VALUE EQUATION
RECENT PRICE CHANGE SOLVED
FOR “ACCESS TO SPORT”
0%
10%
20%
30%
40%
50%
60%
70%
ENTRY PRICE AS % OF SPORT +
"ENTRY"
AND PREMIUM DRAMA
OPERATOR“GAME OF
THRONES”
CHANNEL
PACKAGE
SKY UK
SKY
ATLANTIC
ENTRY TIER
FOXTELSHOWCASEDRAMA PACK
SKY
(PREVIOUS)
SOHO
STANDALONE
CHANNEL
SKY (NOW)SOHO
BUNDLEDWITH
STARTER + ENT
+ 1 PREMIUM

NEW PRICE POINTS TO CONTINUE OUR
GROWTH IN OTT
LOWER PRICED:
TV ONLY PACK
▶Premium GE and Movies
content – HBO, Showtime, Disney
▶Access to SKY’s best Entertainment
content for under $20
TV
ONLY
TV +
MOVIES
▶High contribution due to fixed
nature of sports costs
▶Easy for customers to understand
with highly differentiated content
▶Easy for customers to purchase
and set up for large sporting events
of preferred sporting seasons
LOWER PRICED:
MOBILE ONLY

CONTENT IS STILL KING.WE CONTINUE TO SEEK
EXCLUSIVE ACCESS TO THE CONTENT KIWIS TALK ABOUT
SPORTS
BLOCKBUSTER
MOVIES
PREMIUM
DRAMA
•Seek exclusivity
•Work with the best –
SANZAR, NRL, HBO,
SHOWTIME, DISNEY
•Always seek to secure
relevant digital rights
We will place a premium on content that holds it head high in a world where
customers are overloaded with choice and short on time.

WE CAN SUMMARISE OUR AMBITION WITH OUR
WINNING PROPOSITION
WE WILL WIN BY ENRICHING OUR CUSTOMERS’ LIVES WITH AN
EXCLUSIVE WORLD CLASS SPORTS AND ENTERTAINMENT OFFERING
THROUGH UNDERSTANDING OUR CUSTOMERS, WE’LL ALWAYS HELP
THEM FIND SOMETHING GREAT TO WATCH
AND OUR CONTENT AND EXPERIENCES WILL BE AVAILABLE TO ALL
KIWIS THROUGH OUR RANGE OF PRODUCTS AND PRICING.

A FOCUS ON SIMPLIFICATION AND EFFECTIVENESS
▶SKY NOT KNOWN FOR ITS LARGESE
▶OPPORTUNITIES TO SIMPLIFY PROCESSES AND BETTER
UTILISE OUR ASSETS DO EXIST
▶A FOCUSED EFFORT ON SIMPLIFYING OUR BUSINESS IS
BEING CARRIED OUT
▶AGILE METHODOLOGIES TO REDUCE TIME AND COST
TO DELIVER NEW CUSTOMER EXPERIENCES

01 January 2018© SKY 2013
DIRECTOR OF MARKETING
MIKE WATSON
THE CUSTOMER

HOW WERE THESE SEGMENTS FORMED?
Dependent variable was value of viewing
Cluster analysis
within a Bayesian
belief network
(a machine learning technique)
ETHNOGRAPHIC
Video diaries and in-home depth
interviews of 30 New Zealanders
TRANSACTIONAL
Viewing data from a sample
of 20,000 set top boxes
ATTITUDINAL
Survey of 7,500 subscribers
and 2,500 non-subscribers
Generated insights by triangulating three data sources

GROWRETAIN
THE SEVEN SEGMENTS
Pie charts show SKY’s
penetration of each segment

BELIEFS
NEEDS
VALUED
VIEWING
EXPERIENCE

HOW CAN WE USE THESE SEGMENTS?
Desirable product features in the future
- Deeper immersion –ultra high definition
Desirable Content
- Live sport
Fanatical Heartlanders prefer subscription models
and love the experience of big screen live sport.
They are high ARPU and have residual goodwill towards MY
SKY and the SKY brand.
Generally mid-life Fanatical Heartlanders enjoy control and
some power, but would like to have this reflected back by
SKY demonstrating that they are highly valued.
BELIEFS
NEEDS
VALUED
VIEWING
EXPERIENCE
STRATEGY - RETAIN

SOURCE:
SKY Brand Tracker, Dec 2017
TOTAL: 1146
Numbers refer to number of respondents
Numbers represent current users of services
SKY/NETFLIX/LIGHTBOX

NEW SKY PRICING
SKY ENTERTAINMENT
$25
SKY SPORT
$29.90
SKY MOVIES
$20.93
SOHO
$9.99

INFINITE VIDEO PLATFORM (IVP)
JULIAN WHEELER
CHIEF PRODUCT
& TECHNOLOGY OFFICER

THE OPPORTUNITY
▶VARIETY OF ENTERTAINMENT CHOICES FOR USERS
▶CUSTOMERS SOMETIMES SUBSCRIBE TO MULTIPLE
SERVICES TO SATISFY THEIR VIEWING NEEDS
▶SKY HAS THE BEST CONTENT IN MARKET
▶DEVELOP PROPOSITIONS TO MEET CHANGING
CUSTOMER SEGMENT NEEDS
▶VIEWING EXPERIENCE ACCOUNTS FOR 66% OF CUSTOMER SENTIMENT
▶NEED A GREAT SOLUTION FOR CONTENT DISCOVERY AND TO
SHOWCASE THE BEST CONTENT
▶NEED TO PROTECT AND GROW SUBSCRIBER BASE

DIMENSIONS OF A PRODUCT
▶MULTIPLE VARIABLES TO CONSIDER WHEN DEFINING A PRODUCT
▶BE CONSCIOUS OF THESE VARIABLES AND TARGET SEGMENT NEEDS
PRICE
CONTENT AND PACKAGES
HOW PEOPLE VIEW
DEVICES AVAILABLE
SERVICES MODEL
Premium
Big bundles
Mostly linear
Big screen lean back
Premium, all include
Low cost
Targeted bundles
Mostly ON DEMAND
Device flexibility
Affordable, digital first

SKY’S NEXT GEN CUSTOMER PROMISE
ON DEMAND CENTRIC
APPROACH
SUPERIOR USER
EXPERIENCE AND
CONTENT
COMPANION APP
HOME SCREEN

SKY’S NEXT GEN CUSTOMER PROMISE
FLUID VIEWING
THROUGH
THE CLOUD
MOBILITY –WATCH
WHAT YOU WANT,
WHEN YOU WANT

SKY’S NEXT GEN CUSTOMER PROMISE
PORTABLE LOYALTY
THROUGH FLEXIBILITY OF
DEVICES
SKY AS A CONTENT
NAVIGATOR

SKY’S NEXT GEN CUSTOMER PROMISE
SAFETY NET OF
TRADITIONAL TV
FLEXIBILITY OF
PAYMENT MODELS

WHAT IS
IVP?

THE OPPORTUNITY
▶Modern and image
rich UI showcasing
SKY content
▶Consistent
experience across
devices
▶Fluid viewing – pause
and resume content
from one device to
another
▶Recommendations
based on household
and customer base
viewing
USER EXPERIENCE
▶Multiple primary
devices to appeal to
different segments
▶PREMIUM SKY –
Premium experience
delivered on IP-only
Puck, Next-Gen or
KaonSTBs
▶NON-SKY – Low cost
offering on IP-only
Puck
▶As-an-app
proposition
▶Continue to offer SKY
premium tier
packages as today
▶Also offer lower cost
packages of SKY
content targeting key
segments
▶Month-to-month
commitments on
lower cost offerings
DEVICESPACKAGES
“Showcase SKY’s content”“Use the best technology”“Offer more flexibility”

1.
USER
EXPERIENCE

IVP – A MODERN AND IMAGE-RICH USER
EXPERIENCE
March 2018Confidential - Not for distribution (C) SKY TV 2018

IVP – A MODERN AND IMAGE-RICH USER EXPERIENCE
March 2018Confidential - Not for distribution (C) SKY TV 2018
Home screen
TV Shows screen
My library (recordings, continue watching)
Linear TV – Now Next BannerMore Info screen Channel page
SAMPLE UI SCREENS. NOT FINAL
HOME SCREEN
TV SHOWS SCREENMY LIBRARY
LINEAR TV
CHANNEL
MORE INFO

BIG DATA & USER INTERFACE STRUCTURE
March 2018Confidential - Not for distribution (C) SKY TV 2018
▶IVP offers powerful tools to structure and showcase depth and breadth of content
▶Organising content well enables users to always find something to watch
▶Content sensitive rails curated differently by content type
HOME
TV SHOWS
MOVIESSPORTKIDS
APPS
MY LIBRARY
Featured
VODVODVOD
Recommended For You
LinearLinearLinear
...
...
Continue Watching
PVR
...
PVRPVR
Channels
Linear
...
LinearLinear
Recommended For You
LinearLinearLinear
...
Coming Up
LinearLinearLinear
...
Continue Watching
PVR
...
PVRPVR
Watch Again
PVR
...
PVRPVR
Watch Now
VODVODVOD
...
.........

BEST GLOBAL & LOCAL APPS
March 2018Confidential - Not for distribution (C) SKY TV 2018
▶Introducing Android Operator Tier with IVP
▶Opportunity to promote key apps from Google Play store into SKY experience
▶Aim to promote apps that complement SKY content
▶Customers can then promote their own apps too
MUSIC
KIDS
VIDEO
LOCAL
SPORT
*Sample Apps -to be reviewed for NZ market

2.
DEVICES

DEVICES FOR ALL SEGMENTS
NEXT-GEN STB
IP-ONLY PUCK
PREMIUM SKY
Priced as today
SKY BOX
NON-SKY
IP-ONLY PUCK
New low cost
packages
AS AN APP
(Bring Your Own device)
PRIMARY SEGMENTSSECONDARY SEGMENTS
FANATICAL
HEARTLANDER
HABITUAL
HEARTLANDER
MODERN
HOMEMAKERS
NEUTRAL
COUPLES
PRIMARY SEGMENT
PRIMARY SEGMENT
SECONDARY SEGMENT
ONLINE
ADDICTS
MODERN
HOMEMAKERS
NEUTRAL
COUPLES
COMPANION
APPS

FEATURES FOR ALL PROPOSITIONS
REGARDLESS OF PROPOSITION, ALL CUSTOMERS WILL
GET AMAZING FEATURES
On Demand in focusRecommendations
Fluid viewing across
devices
Fully featured
Companion apps
COMPANION
APPS

FEATURES FOR ALL PROPOSITIONS
REGARDLESS OF PROPOSITION, ALL CUSTOMERS WILL
GET AMAZING FEATURES
Restart TV + Reverse
EPG
Search across
content types
Binge watchingSKY linear channels

FULLY FEATURED COMPANION APP
▶IVP Companion app will have all the same
features as the STB/Puck
▶Find, manage and play all your great shows
and events
▶Full Guide, VOD catalogue, Restart TV,
Reverse EPG, recommendationsetc
▶Supportedplatforms- iOS,
Android, web browsers,
Apple TV, Xbox One, PS4,
Chromecast, Samsung Smart
TVs, Sony TVs(Android TV),
LG- TV(webos), Rokuand
Amazon FireTV

3.
PACKAGES

IVP HOUSEHOLDS SINGLE STB OR PUCK
OR
1 STB/PUCK
PREMIUM SKY
1 PUCK
NON-SKY
COMMON TO BOTH PROPOSITIONS:
≤ 5 COMPANION
DEVICES
STB/PUCK + 1 STREAM
MODERN
HOMEMARKERS
NEUTRAL
COUPLES
FANATICAL
HEARTLANDERS
HABITUAL
HEARTLANDERS
PREMIUM SKY
MODERN
HOMEMARKERS
NEUTRAL
COUPLES
NON-SKY
COMPANION
APPS

IVP HOUSEHOLDS MULTIPLESTBS OR PUCKS
2 OR MORE STBS
OR PUCKS
PREMIUM SKY
2 OR MORE PUCKS
NON-SKY
COMMON TO BOTH PROPOSITIONS:
STBS/PUCKS + 2
IN-HOME CONCURRENT
STREAMS
MODERN
HOMEMARKERS
NEUTRAL
COUPLES
FANATICAL
HEARTLANDERS
HABITUAL
HEARTLANDERS
PREMIUM SKY
STBS/PUCKS + 1
OUT-HOME
STREAMS
≤ 5 COMPANION
DEVICES
MODERN
HOMEMARKERS
NEUTRAL
COUPLES
NON-SKY
COMPANION
APPS

IVP PACKAGES
MODERN
HOMEMARKERS
NEUTRAL
COUPLES
FANATICAL
HEARTLANDERS
HABITUAL
HEARTLANDERS
PREMIUM SKY
▶Subset of Premium SKY –different
channel packages Linear channels
will target key segments
▶Low entry point for customers
▶Flexible contract terms
SOHO
SKY
STARTER
SKY
ENTERTAINMENT
SKY
SPORT
SKY
MOVIES
BONUS: SoHo‘on us’ if
SKY ENTERTAINMENT +
(SPORT and/or MOVIES)
NEW
PACKAGE
NEW
PACKAGE
NEW
PACKAGE
MODERN
HOMEMARKERS
NEUTRAL
COUPLES
NON-SKY

IVP SUPPORT MODEL
MODERN
HOMEMARKERS
NEUTRAL
COUPLES
FANATICAL
HEARTLANDERS
HABITUAL
HEARTLANDERS
PREMIUM SKY
▶Premium support service
▶Technician install available
▶Can self-install if dish available
▶Call centre or online help
▶Device is SKY owned
▶Digital first model
▶100% self-install
▶Call centre on premium call line
▶Support via online help
▶Device is SKY owned
▶Retail a later model to support
MODERN
HOMEMARKERS
NEUTRAL
COUPLES
NON-SKY

IVP SUMMARY
▶IVP – a new platform to deliver a rich viewing experience
▶Live and linear, On Demand and Apps, Network and Local PVR
▶Big Data with Recommendations and Personalisation
▶Choice of Devices for Satellite and Broadband
▶Multiple product propositions and packages to meet
the needs of All New Zealanders
▶First proposition in market within 12 months

|
▶Delivered from concept to market in just 5
weeks
▶We are transforming the way we work
through
agility at scale
▶More than “agile” – it requires:
▶Cloud
▶Automation, incl. Ci/cd
▶Dev + security + ops
▶Productisation
▶Collaboration
NEON
SKYGO
FANPASS
SKY TV
SKY
PERKS
SKY SPORT HIGHLIGHTS
SKYTV
FOR ALEXA
INTRODUCING OUR RANGE OF APPS

|
March 2018Confidential - Not for distribution (C) SKY TV 2018
Page 52
▶“Agile” is an adjective, not a noun: able to move quickly and easily.
▶Its not what you do, its how you do it –we have changed the way we work.
▶Agility enables us to change and adapt quickly to the changing needs of our
customers.
▶The right cadence of change and delivery gives the feedback loops required
to have agility.
▶Small changes, constantly measured, drive in quality.
▶Our leaders develop capability and set direction – “build the right thing”.
▶Our cross functional teams apply agile practices, working to common goals to
produce working solutions every sprint – “build the thing right”.
OUR TRANSFORMATION

|
OUR TRANSFORMATIONOVER THE PAST TWO YEARS
March 2018Confidential - Not for distribution (C) SKY TV 2018
Page 53
PROJECT
FOCUS
PRODUCT
FOCUS
VELOCITY &
AGILITY
CUSTOMER
CENTRIC
QUALITY
Ring fenced
teams
Right-weight
governance
Modular services
Monitoring
Continuous quality
management
Data driven
decision making
Shared
capabilities
Automated
testing
Automated
infrastructure scaling
Product oriented
infrastructure
Cross functional
teams
Automated environment
deployment
API
management
Hybrid cloud
Standardised tools
and platforms
Cloud Ops
Circuit
breakers
A/B testing
Performance
testing “aaS”
Release
management
Automated hybrid
deployment
Scalable
components
Blue / Green
environments
Quality measurement
“built-in”
Team member
mobility
Cloud
platforms
Sky private
cloud
CI/CD
Repeatable
environment build
WE ARE CHANGING THE WAY WE DELIVER OUR PRODUCTS AND TECHNOLOGY, DEVELOPING AND
IMPLEMENTING THE CAPABILITIES REQUIRED TO ACHIEVE THE REQUIRED VELOCITY FOR OUR
CUSTOMERS AND PRODUCTS, WITH THE AGILITY TO RESPOND TO AN EVER CHANGING ENVIRONMENT
WHILE ENSURING BROADCAST QUALITY.
People
Process
Technology
Capability

|
THE NEW SKYGO
LAUNCHING SOON
March 2018Confidential - Not for distribution (C) SKY TV 2018
Page 54
▶WATCH SELECTED LIVE
SKY CHANNELS ON
MOBILE, TABLET & PC –
TV, MOVIES & SPORTS
▶7 DAY PROGRAM
GUIDE FOR SELECTED
SKY CHANNELS
ALL THIS, PLUS ...
▶WATCH WHAT YOU WANT, WHEN YOU
WANT - ON DEMAND TV, MOVIES, BOX
SETS AND SPORTS ON MOBILE, TABLET
AND PC
▶FIND WHAT YOU WANT EASILY
FEATURED AND MOST POPULAR ON THE
HOME SCREEN; SEARCHABLE
CATALOGUE & GUIDE
TODAYNEW

BROADCAST
& MEDIA
TEX TEIXEIRA
DIRECTOR OF BROADCAST
& MEDIA

SKY TV STATION
PAST | PRESENT | FUTURE
20062018
CHANGE IS THE LAW OF LIFE AND THOSE WHO LOOK ONLY TO THE PAST OR PRESENT ARE CERTAIN TO MISS THE FUTURE.
– JOHN F. KENNEDY

PRESENT STATE
▶FACILITY BUILD 2006 ($80M)
▶HD | STEREO 5.1 | ROBUST REDUNDANCY
▶80 ENTERTAINMENT AND SPORTS CHANNELS
▶LINEAR AND VOD WORKFLOWS
LINEAR DTH
MOBILE DEVICES

BUILDING NEW CAPABILITIES
▶VOD AS GOOD AS LINEAR
▶SPORTS FAST TURN AROUND
▶SIMPLIFY LINEAR OPERATIONS
▶SATELLITE BANDWIDTH DIVIDEND

CONTENT FACTORY 2020
SCALABLE | EFFICIENT | AGILE | MULTI-PLATFORM
▶VOD EXCELLENCE
▶EVENT BASED POP-UPs
▶SPORTS HUB / IP

4K / HDR NEXT GEN EXPERIENCE
▶4K = SIMILAR PICTURE QUALITY TO HD
▶HDR = BETTER CONTRAST, GREATER BRIGHTNESS,
WIDER COLOUR PALETTE

4K / HDR – OUR ROADMAP
▶CONTENT
▶INFRASTRUCTURE
▶LOCAL ORIGINATION

SPORT
RICHARD LAST
DIRECTOR OF SPORT
EPD Review and Commit Session 2EPD Review and Commit Session 2

KEY MESSAGES
EPD Review and Commit Session 2EPD Review and Commit Session 2
▶SPORT DRIVES CUSTOMER TAKE UP
AND RETENTION
▶OTT STRUGGLES TO COMPETE WITH
BUNDLED SPORTS PACKAGE
▶SKY BEST PARTNER FOR NZ SPORTS

SUPER RUGBY 19:30
AVERAGES
EPD Review and Commit Session 2EPD Review and Commit Session 2
All PEOPLE 5+
AVERAGE AUDIENCES
19:30 GAMES20162017
Y-ON-Y CHANGE
Friday196,600221,100+12%
Saturday208,100238,600+15%

SPORT STOPS
THE NATION

EPD Review and Commit Session 2EPD Review and Commit Session 2
▶MEASUREMENT CHALLENGING
▶DATA PROJECTS UNDERWAY

“MY TEAM”DRIVES
AND VALIDATES MY
SUBSCRIPTION
EPD Review and Commit Session 2EPD Review and Commit Session 2

SKY HAS MORE SPORTS
THAN OTHER LEADING
SUBSCRIPTION TV
PLATFORMS AROUND THE
WORLD

SKY’S PLATFORMS DELIVER
WHAT NZ CUSTOMERS
WANT
EPD Review and Commit Session 2EPD Review and Commit Session 2

SUPERBOWL - TRADITIONAL DWARFS
OTT
020,000,00040,000,00060,000,00080,000,000100,000,000120,000,000
SUPER BOWL 2018
LinearOTT

NFL – AMAZON V LINEAR
02,000,0004,000,0006,000,0008,000,00010,000,00012,000,00014,000,00016,000,000
LIONS ALL BLACKS TEST 3
NFL THURSDAY NIGHT FOOTBALL
LinearOTT

EPD Review and Commit Session 2EPD Review and Commit Session 2
▶MAJOR SPORTS RENEWALS
▶2, 3 YEARS OR LONGER UNTIL
RENEWAL
▶WE EXPECT TO RENEW

EPD Review and Commit Session 2EPD Review and Commit Session 2
SANZAARFEBRUARY - AUGUST
NRL MARCH - SEPTEMBER
NZ CRICKET OCTOBER - APRILOCTOBER - APRIL
A-LEAGUEOCTOBER - APRILOCTOBER - APRIL
JanuaryFebruary MarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecember
YEAR-ROUND COVERAGE

EPD Review and Commit Session 2EPD Review and Commit Session 2
▶NO COMMENT
▶STRATEGICALLY IMPORTANT
▶MAIN BOARD SUB-COMMITTEE
▶FULL BOARD APPROVAL
SANZAAR RENEWAL

SKY provides what NZ Sports bodies need
•Large existing customer base
•Proven platform for all New Zealander’s
•State of the art outside broadcast capability
SKY IS AN ATTRACTIVE, EXPERIENCED
ANDPROVEN PARTNERFOR NZ SPORTS
BODIES

SANZAAR RENEWAL
EPD Review and Commit Session 2EPD Review and Commit Session 2
▶NEGOTIATIONS SHOULD START THIS
YEAR
▶STRATEGICALLY IMPORTANT
▶NOTHING TO GAIN BY DISCUSSING
PLANS IN PUBLIC

EPD Review and Commit Session 2EPD Review and Commit Session 2
▶BLACKCAPS V ENGLAND IN THE
PINK BALL TEST
▶SILVER FERNS IN THE TAINI
JAMISON FINALS
▶WARRIORS IN THE NRL
▶CHIEFS, HIGHLANDERS AND
HURRICANES IN INVESTEC SUPER
RUGBY

EPD Review and Commit Session 2EPD Review and Commit Session 2
▶SHANE VAN GISBERGEN AND CO.
IN THE SUPERCARS
▶BRENDON HARTLEY IN FORMULA 1
▶THE WORLD’S BEST GOLFERS IN
THE WGC DELL TECHNOLOGIES
MATCH PLAY
▶LYDIA KO IN THE LPGA

EPD Review and Commit Session 2EPD Review and Commit Session 2
▶FIGURE SKATING WORLD
CHAMPIONSHIPS
▶AUCKLAND CITY TAKE ON
EASTERN SUBURBS IN THE NZ
PREMIERSHIP SEMI-FINALS

EPD Review and Commit Session 2EPD Review and Commit Session 2
▶HYUNDAI A-LEAGUE
▶SNOOKER’S PLAYERS
CHAMPIONSHIP
▶CYCLING FROM EUROPE

EPD Review and Commit Session 2EPD Review and Commit Session 2
▶77 HOURS AND 15
MINUTES OF LIVE SPORT
ON SATURDAY ALONE

KEY MESSAGES
EPD Review and Commit Session 2EPD Review and Commit Session 2
▶SPORT DRIVES CUSTOMER TAKE UP
AND RETENTION
▶OTT STRUGGLES TO COMPETE WITH
BUNDLED SPORTS PACKAGE
▶SKY BEST PARTNER FOR NZ SPORTS

ENTERTAINMENT
TRAVIS DUNBAR
DIRECTOR OF ENTERTAINMENT
CONTENT

SKY’S HISTORICAL CONTENT PILLARS
LIVE SPORTS
BLOCKBUSTER
MOVIES
INTERNATIONAL AFFILIATES
BBC
DISCOVERY
VIACOM

Premium Drama drives our linear, On Demand and VOD services:
SoHo, SKY BOX SETS, SKY 5, VIBE, UKTV, SKY ON DEMAND, SKY GO, NEON....
EXCLUSIVE ENGAGING EVOLVING
PREMIUM DRAMA THE NEW PILLAR

BEST-IN-CATEGORY. PROVEN STUDIOS. GUARANTEED SUPPLY.
PREMIUM DRAMA KEY SUPPLY

HBO
▶GAME OF THRONES (& upcoming spin offs)
▶WESTWORLD 2
▶BIG LITTLE LIES 2
▶SHARP OBJECTS (from the author of Gone Girl)
FX
•AMERICAN CRIME STORY
•FEUD: CHARLES AND DIANA
•THE MAYANS (Sons of Anarchy spin-off)
•FUED (the Getty kidnapping)
CBS
•MADAME SECRETARY
•BULL
•SCORPION
SKY is the EXCLUSIVE home of:
SHOWTIME
•BILLIONS
•RAY DONOVAN
•THE AFFAIR
WB/DC
•THE FLASH
•ARROW
•SUPERGIRL
•LEGENDS OF TOMORROW
•SUPERNATURAL
•SHAMELESS
Plus a horde of key independent Drama supply:
THE LOOMING TOWER, KNIGHTFALL, HARD SUN...
BEST-IN-CATEGORY. PROVEN STUDIOS. GUARANTEED SUPPLY.
PREMIUM DRAMA KEY SUPPLY

HBO
▶GAME OF THRONES (& upcoming spin offs)
▶WESTWORLD 2
▶BIG LITTLE LIES 2
▶SHARP OBJECTS (from the author of Gone Girl)
FX
•AMERICAN CRIME STORY
•FEUD: CHARLES AND DIANA
•THE MAYANS (Sons of Anarchy spin-off)
•FUED (the Getty kidnapping)
CBS
•MADAME SECRETARY
•BULL
•SCORPION
SKY is the EXCLUSIVE home of:
SHOWTIME
▶BILLIONS
▶RAY DONOVAN
▶THE AFFAIR
WB/DC
•THE FLASH
•ARROW
•SUPERGIRL
•LEGENDS OF TOMORROW
•SUPERNATURAL
•SHAMELESS
Plus a horde of key independent Drama supply:
THE LOOMING TOWER, KNIGHTFALL, HARD SUN...
BEST-IN-CATEGORY. PROVEN STUDIOS. GUARANTEED SUPPLY.
PREMIUM DRAMA KEY SUPPLY

HBO
▶GAME OF THRONES (& upcoming spin offs)
▶WESTWORLD 2
▶BIG LITTLE LIES 2
▶SHARP OBJECTS (from the author of Gone Girl)
FX
▶AMERICAN CRIME STORY
▶FEUD: BUCKINGHAM PALACE
▶THE MAYANS (Sons of Anarchy spin-off)
▶TRUST (the Getty kidnapping)
CBS
•MADAME SECRETARY
•BULL
•SCORPION
SKY is the EXCLUSIVE home of:
SHOWTIME
▶BILLIONS
▶RAY DONOVAN
▶THE AFFAIR
WB/DC
•THE FLASH
•ARROW
•SUPERGIRL
•LEGENDS OF TOMORROW
•SUPERNATURAL
•SHAMELESS
Plus a horde of key independent Drama supply:
THE LOOMING TOWER, KNIGHTFALL, HARD SUN...
BEST-IN-CATEGORY. PROVEN STUDIOS. GUARANTEED SUPPLY.
PREMIUM DRAMA KEY SUPPLY

HBO
▶GAME OF THRONES (& upcoming spin offs)
▶WESTWORLD 2
▶BIG LITTLE LIES 2
▶SHARP OBJECTS (from the author of Gone Girl)
FX
▶AMERICAN CRIME STORY
▶FEUD: BUCKINGHAM PALACE
▶THE MAYANS (Sons of Anarchy spin-off)
▶TRUST (the Getty kidnapping)
CBS
•MADAME SECRETARY
•BULL
•SCORPION
SKY is the EXCLUSIVE home of:
SHOWTIME
▶BILLIONS
▶RAY DONOVAN
▶THE AFFAIR
WB/DC
▶THE FLASH
▶ARROW
▶SUPERGIRL
▶LEGENDS OF TOMORROW
▶SUPERNATURAL
▶SHAMELESS
Plus a horde of key independent Drama supply:
THE LOOMING TOWER, KNIGHTFALL, HARD SUN...
BEST-IN-CATEGORY. PROVEN STUDIOS. GUARANTEED SUPPLY.
PREMIUM DRAMA KEY SUPPLY

HBO
▶GAME OF THRONES (& upcoming spin offs)
▶WESTWORLD 2
▶BIG LITTLE LIES 2
▶SHARP OBJECTS (from the author of Gone Girl)
FX
▶AMERICAN CRIME STORY
▶FEUD: BUCKINGHAM PALACE
▶THE MAYANS (Sons of Anarchy spin-off)
▶TRUST (the Getty kidnapping)
CBS
▶NCIS NEW ORLEANS
▶MADAME SECRETARY
▶BULL
▶SCORPION
SKY is the EXCLUSIVE home of:
SHOWTIME
▶BILLIONS
▶RAY DONOVAN
▶THE AFFAIR
WB/DC
▶THE FLASH
▶ARROW
▶SUPERGIRL
▶LEGENDS OF TOMORROW
▶SUPERNATURAL
▶SHAMELESS
Plus a horde of key independent Drama supply:
THE LOOMING TOWER, KNIGHTFALL, HARD SUN...
BEST-IN-CATEGORY. PROVEN STUDIOS. GUARANTEED SUPPLY.
PREMIUM DRAMA KEY SUPPLY

HBO
▶GAME OF THRONES (& upcoming spin offs)
▶WESTWORLD 2
▶BIG LITTLE LIES 2
▶SHARP OBJECTS (from the author of Gone Girl)
FX
▶AMERICAN CRIME STORY
▶FEUD: BUCKINGHAM PALACE
▶THE MAYANS (Sons of Anarchy spin-off)
▶TRUST (the Getty kidnapping)
CBS
▶NCIS NEW ORLEANS
▶MADAME SECRETARY
▶BULL
▶SCORPION
SKY is the EXCLUSIVE home of:
SHOWTIME
▶BILLIONS
▶RAY DONOVAN
▶THE AFFAIR
WB/DC
▶THE FLASH
▶ARROW
▶SUPERGIRL
▶LEGENDS OF TOMORROW
▶SUPERNATURAL
▶SHAMELESS
Plus a horde of key independent Drama supply:
THE LOOMING TOWER, KNIGHTFALL, HARD SUN SUN...
BEST-IN-CATEGORY. PROVEN STUDIOS. GUARANTEED SUPPLY.
PREMIUM DRAMA KEY SUPPLY

▶Linear
▶Catch-Up
▶Streaming
▶Video On Demand
▶Box Sets (full seasons)
▶Download To Go
▶Reverse EPG
▶Restart TV
▶Network PVR
▶Free TV
▶OTT
INDUSTRY-LEADING RIGHTS
ENTERTAINMENT CONTENT STRATEGY

CONTENT RIGHTS AND AMMORTISATION
▶Key supply is prioritised
▶Each deal is staggered
▶Key dramas have ‘Run-of-Series’ commitments

CONTENT RIGHTS AND AMMORTISATION
▶Each deal is one piece of the jigsaw
▶Amortisationis over a variety of channels, platforms, products, &
windows
▶This flexibility makes us unique
▶Our prices reflect that flexibility

“BUT WHAT ABOUT THE GLOBAL
OTT PLAYERS’ CONTENT SPEND?”
THE REALITY BEHIND THE HEADLINES
▶I t ’s not all spent on original drama
▶They still license non-exclusive library
▶Their ORIGINAL content spend doesn’t match SKY’s
aggregated power
▶OTT services are complementary to Pay TV

THE POWER OF SKY’S BROAD
CONTENT PORTFOLIO
▶The seven Hollywood Movie Studios plus leading independents
spend in excess of $US8B p.a. combined on production
▶Some studios alone make 5-7 movies p.a. with a $US200M+
production budget each (before marketing spend)
▶SKY’s key Drama suppliers would total over $US8B production
spend p.a. combined
▶One key SKY Affiliate alone spends $US3B on annual
production
▶And that doesn’t even count major Sports, All International
Affiliates, and SKY’s independent content cumulative value
A BACK-OF-THE-ENVELOPE COMPARISON

THE POWER OF SKY’S BROAD
CONTENT PORTFOLIO
A BACK-OF-THE-ENVELOPE COMPARISON
OTT GLOBALS
▶APPLE $US2B +
▶AMAZON $US4B +
▶NETFLIX $US7B +
SKY’S SUPPLY
▶MOVIE STUDIOS $US8B+
▶DRAMA SUPPLIERS $US8B +
▶ENT AFFILIATES $US12B +
▶SPORTS $USB...?

WILL YOUR
KEY SUPPLIERS GO D.T.C.?
▶Some DTC’s have already gone to Australia to
marginal results
▶Only a couple of stand-alone brands would resonate
with Kiwis
▶Most SKY key content supply is already committed
▶Our size and penetration still appeals to key
distributors....

WHAT IS THE OUTLOOKFOR
SKY’S CONTENT COSTS?
▶Premium content is not without cost; however...
▶As Linear viewing reduces, VOD viewership will grow
▶VOD is more cost-efficient
▶Non-performing VOD content can be more easily rationalised
▶Improved viewing data will further help content rationalisation

CONTENT IS STILL KING
IN THE MEDIA BUSINESS
SKY’s upcoming drama slate...

ADVERTISING
RAWINIA NEWTON
DIRECTOR OF ADVERTISING
SALES

ADVERTISING OVERVIEW
2.6b spent on advertising in New Zealand
2017 TV revenue = $566m
22% of all advertising spend is on television
TV advertising revenue in NZ grew 1.3% in 2017 after declining
for 5 consecutive years
Digital continues year on year growth. +10% in 2016 to $890m
Search & Directories$490m
Classifieds$154m
Display$143m
Social Media$ 58m
Mobile$ 44m
72%

REVENUE UPLIFT FROM BIG SPORT EVENTS
Source: Pricewaterhous e Coopers
-3.6
1.1
9.9
0.1
2.3
3.7
-2.6
-6.7
-10.4
-15.8
-17.9
-4.0
2.8
7.9
11.3
4.4
-0.8
4.9
1.7
1.3
3.4
1.4
-3.0
-...
-3.0
6.2
8.0
3.3
2.2
-6.9
-4.4
-4.8
3.2
-5.7
-4.9
1.5
-6.6
-4.7
-8.5
-8.3
-4.1
5.7
2.4
0.4
-20.0
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
Mar-07
Jun-07
Sep-07
Dec-07
Mar-08
Jun-08
Sep-08
Dec-08
Mar-09
Jun-09
Sep-09
Dec-09
Mar-10
Jun-10
Sep-10
Dec-10
Mar-11
Jun-11
Sep-11
Dec-11
Mar-12
Jun-12
Sep-12
Dec-12
Mar-13
Jun-13
Sep-13
Dec-13
Mar-14
Jun-14
Sep-14
Dec-14
Mar-15
Jun-15
Sep-15
Dec-15
Mar-16
Jun-16
Sep-16
Dec-16
Mar-17
Jun-17
Sep-17
Dec-17
Market 1.5%
SKY 14%
Rugby World
Cup
Olympics
London
Olympics
Beijing
RWC
France
Commonwealth
Games
Cricket
World Cup
Market 3.2%
SKY 26%
Commonwealth
Games
Rugby
World Cup
Market 1.5%
SKY 29%
Olympics
Rio
Lions Tour
NZ
Market 5.7%
SKY 26%
TOTAL TELEVISION REVENUE -% CHANGE YEAR ON YEAR

SKY ADVERTISING OVERVIEW
SKY multi channel sales
▶Traditional TV advertising
▶Programme sponsorship
▶Sport packages
▶Owned and operated channels + 3rd party channel sales on behalf of
Affiliate Channel partners
Successful history of increasing revenue and share by leveraging big sport
events.
Sales strategy positioned around SKY’s premium content, audience and low
advertising minutes.

THE FUTUREOF
TV ADVERTISING
Programmatic buying of advertising is increasing, while still small the revenue doubled in
2017
Automation of transacting airtime and inventory management is becoming mandatory
▶SKY Landmark system upgrade in 2018 to enable automation of booking and
optimisation of inventory
Addressable targeted advertising growing on television
▶SKY investigating dynamic replacement ad insertion in live linear digital feeds eg. SKY
Go and Fan Pass

THE FUTUREOF
TV ADVERTISING
AUDIENCE MEASUREMENT
▶Cross platform measurement and cross platform metrics
▶Total video currency
▶50% panel expansion of the Nielsen TAM panel
ThinkTV NZ LAUNCH ON THURSDAY 29 MARCH
▶SKY, TVNZ and Mediaworks launching ThinkTV in the New Zealand
market
▶ThinkTV is a dedicated research-driven and marketing company
focused on helping the advertising and marketing community get
the very best from commercial TV
▶Aimed at advertising agencies, media and advertisers

REGULATORY & EXTERNAL
AFFAIRS
CHRIS MAJOR
DIRECTOR OF EXTERNAL
AFFAIRS

GOVERNMENT RELATIONS
NEW GOVERNMENT 2017
REGULATORY CHANGE IN BROADCASTING AND
COMMUNICATIONS SECTOR?
▶CLASSIFICATIONOFONLINECONTENT
▶ACCESSIBILITY
▶PUBLICSERVICEMEDIA

MINISTERIALFOCUSONNON-COMMERCIAL, ‘PUBLIC
GOOD
’ MEDIA: MORELOCALCONTENTANDSTRONGER,
INDEPENDENTJOURNALISM
3 LEVERS:
▶FUNDING
▶REGULATION
▶CROWN-OWNEDBROADCASTERS

DIGITAL CONVERGENCE
▶REGULATORYRESPONSE?
▶INDUSTRYCONSULTATIONUNDERWAY
▶CONSISTENTRULESFORTRADITIONALANDDIGITAL
CONTENT
, ACROSSLOCALANDINTERNATIONAL
PROVIDERS

REGULATION OF SPORT
▶WOULDHAVEHADDIRECONSEQUENCESFORNZ
SPORTCODES
▶NOSUCHTHINGAS“FREE” INSPORTBROADCASTING–
SOMEONEHASTOPAY
▶FREE-TO-AIRBILLDIDNOTPASSFIRSTREADING

PIRACY
▶REVIEWOFCOPYRIGHTACTAPRIORITY
▶CURRENTPIRACYTOOLSLIMITED:
‘3 STRIKES’ LAWINEFFECTIVE
COURTACTIONAGAINSTNZ-BASEDPROMOTERSOF
FULLY-LOADEDINTERNETSTREAMINGDEVICES
▶SITE-BLOCKINGORDERSABETTERMECHANISM

MEDIA
▶ENGAGEMENTWITHNEWZEALANDERSTHROUGH
TRADITIONALANDSOCIALMEDIA
▶‘FAIRDEALING’ DISPUTERESOLVED
NZ HERALD, STUFF, MEDIAWORKSANDTVNZ

OPERATIONS
MARTIN WRIGLEY
DIRECTOR OF OPERATIONS
EPD Review and Commit Session 2EPD Review and Commit Session 2EPD Review and Commit Session 2

SKY BUSINESS
EPD Review and Commit Session 2EPD Review and Commit Session 2
BUSINESS UNITS:
SKY
TELEVISION
SKY MUSIC
MOVIELINK
BELIEVE IT
OR NOT?

GET THE PICTURE!
HOSPITALITY
PUBS CLUBS
LICENSED SECTORS
ACCOMMODATION
HOTELS MOTELS
RETAIL/CORPORATE
OFFICES SHOPS
HOSPITALS STADIUMS

ACCOMMODATION
▶BOOMING VISITOR NUMBERS
▶HIGH PENETRATION
▶50% REVENUE WITHIN THIS
SECTOR

YEAR ON YEAR ARRIVALS
▶DEMAND INCREASING
▶HEAVY INVESTMENT IN NEW
HOTELS COMING ON LINE
▶CURRENT INFRASTRUCTURE
WON’T CATER FOR GROWTH

HOSPITALITY
▶PUBS & CLUBS
▶LIVE SPORT & PPV
▶30% REVENUE

RETAIL & CORPORATE
▶DIVERSE BUSINESS SECTOR
▶20% REVENUE
▶FROM THE OFFICE, TO GYMS,
TO FISHING BOATS AND
EVERYTHING IN-BETWEEN

OTHER BUSINESS UNITS
NEW ZEALAND’S LARGEST SUPPLY OF BACKGROUND
AND FOREGROUND MUSIC TO BUSINESSES
OFFERING THE BEST OF NEW RELEASE PAY PER VIEW
MOVIES IN MAJOR HOTELS ACROSS NEW ZEALAND
HOSTING CORPORATE EVENTS AND WEEKLY QUIZZES
IN OVER 250 VENUES ACROSS NEW ZEALAND

SUPPORT SERVICES
EPD Review and Commit Session 2EPD Review and Commit Session 2
▶TECHNICAL
SUPPORT
▶CUSTOMER
SERVICES

CUSTOMER SERVICE
▶KIWI BASED CONTACT CENTRE
▶SKILLED ACROSS ALL
CHANNELS
▶MULTI AWARD WINNING

TECHNICAL SUPPORT
▶SKILLED INSTALLER BASE
▶NATIONWIDE SUPPORT
NETWORK
▶SHORT LEAD TIME FOR
SERVICE

FINANCE
JASON
HOLLINGWORTH
CFO

STRATEGY
▶STABILISE EARNINGS & SUBSCRIBER
GROWTH
▶SUBSCRIBER GROWTH VS REVENUE LOST
FROM SPIN DOWN
▶OTT GROWTH TO LEVERAGE FIXED
PROGRAM COSTS

SKY’S COST STRUCTURE
1H FY18, $m%
REVENUE
433.1
PROGRAMMING FIXED
100.1423%
PROGRAMMINGVARIABLE
66.7615%
VARIABLE SUBSCRIBERCOSTS
4210%
FIXED B&I
46.111%
FIXED OTHER
24.66%
TOTALCOSTS
279.665%
EBITDA
153.535%
DEPRECIATION
51.212%
EBIT
102.324%
▶Core ARPU $83.98
▶25% of Costs Variable, Contribution Margin > $62
▶Spin Down Costs $17 vs $62 when Customers Churn

SKY’S COST STRUCTURE:SPIN DOWN RISK
▶SUBSCRIBER SPINDOWN @ $17NET MARGIN
▶LOST SOHO REVENUE, $8 MILLION PER PA
▶NEW CUSTOMERS @ $45 NET MARGIN

SKY’S COST STRUCTURE: PROGRAM COSTS
▶APPROX 50% PROGRAM
COSTS RELATE TO SPORT
▶SPORTS TIER @$29.90 <
SPORTS PROGRAM COSTS
▶PROGRAM COSTS: 40% NZ$,
40% US$, 20% A$
▶SATELLITE TO BECOME A
FINANCE LEASE ($A30M PA)

SKY’S COST STRUCTURE: DEPRECIATION
DEPRECIATION ON EXISTINGSKY ASSETS @ 31 DECEMBER 2017, $
FY18FY19
FY20
FY21FY22
98,573,99981,605,407
58,875,478
33,014,27011,394,801

SATELITE
▶D1 SIGNED 2003, LAUNCHED 2006, EOL 2021
▶WE INTEND TO SECURE CAPACITY BEYOND 2021;
-4 v 7 TRANSPONDERS
-SHORT TERM LEASE
-100K RURAL + 200-300K HAPPY MYSKY
CUSTOMERS
-100% NZ COVERAGE (STRATEGIC)
▶TARGET IS 50% COST
▶WILL HAVE PARTIAL OFFSET FROM IP DELIVERY COSTS

SATELITE PLATFORM
TODAY
PACE STB
330,000
KAON STBS– FUSION
370,000
KAON STBS– IVP
NEW 4KSTB
TRADITIONAL TV PUCK
TRADITIONALTV CUSTOMERS
700,000
OTT PUCK
SKY APP
700,000
MULTIROOM/COMMERCIAL
270,000
TOTAL STB’S
970,000
▶Mix will depend upon:
-Securing New Content Rights
-Cost Effective Multicast /CDN Capacity
-Consumer Uptake of Uncapped B.B.
-Interest in linear v VOD

CAPEX PROFILE
FOR ILLUSTRATIVE PURPOSES ONLY, THIS IS NOT GUIDANCE
Illustrationof Capex Profile ($000)
FY18FY19FY20FY21
INSTALL
20,00015,00010,0005,000
DECODERS
10,00015,00015,00015,000
TVSTATION
5,0005,00030,0005,000
OB TRUCKS
--12,00012,000
PROJECTS
35,00035,00020,00020,000
TOTAL
70,00070,00087,00057,000
▶4K/HDR Investment
presents
monetisation and
differentiation
opportunities

GOODWILL
▶$1.4 BILLION ASSET
▶NTA $3.47/SHARE
▶IMPAIRMENT IS A NON CASH CHARGE

DEBT AND DIVIDENDS
▶$168M BANK DEBT, $100M BOND @ 31 DECEMBER 2017
▶SANZAR ENDS DECEMBER 2020, BANK FACILITY
MATURES JULY 2020, BOND MATURES MARCH 2021
▶5 DIVIDEND PAYMENTS TO JULY 2020
(5 X 7.5 CPS = $145M)
▶7.5 CPS INTERIM = 38% OF NPAT

DISCLAIMER
Thispresentationmaycontainforward-lookingstatementsincludingprojections,forecasts,assumptions,
estimates,targets,expectationsorotherstatementsthatrelatetofutureeventsandperformance.
Anyforward-lookingstatementscontainedinthismaterialarebasedonSKY'scurrentexpectationsregarding
futureeventsandresultsandarebasedonassumptionswhichSKYthinksarereasonable,reflectingSKY's
assessmentandinterpretationoftheinformationavailabletoit atthetimethismaterialwasprepared. However,
allforward-lookingstatementsare,bytheirnature,susceptibletouncertainty. Actualeventsorresultsmaydiffer
materiallyfromtheexpectationsandassumptionsexpressedorimpliedinanyforward-lookingstatementsdueto
variouschanges,risksanduncertainties,manyofwhicharenotwithinthecontrolofSKYandcannotbe
predictedbySKY. Recipientsofthismaterialarecautionednottoplaceunduerelianceonanyforward-looking
statements.
Nothinginthismaterialistoberegardedasa representation,warranty,promiseorguaranteethatanyforward-
lookingstatementwillbeachievedoroccur(whetheronthebasisdescribedinthismaterialorotherwise)orthat
theexpectationsorassumptionsunderlyinganyforward‐lookingstatementwillinfactbecorrect.Exceptas
requiredbylaworbythelistingrulesofthestockexchangesonwhichSKYislisted,SKYundertakesno
obligationtoupdateanyforward-lookingstatementscontainedinthismaterialforanyreasonafterthereleaseof
thismaterial,evenif thingschangematerially.

GLOSSARY
3DThreeDimensionalDSRDirectSalesRepresentativeIHDDInternalHardDiskDrivePUPPost-productionUpgradeProject
4K4 timesresolutionofHDDSSG
DigitalSwitchoverSteeringGroupIPInternetProtocolPVRPersonalVideoRecorder
ACCAccidentCompensationCorporationDTH
DirecttoHome(satellitedelivery)ISPInternetServiceProviderPWOPaperlessWorkOrder
ADSLAsymmetricDigitalSubscriberLineDTC
DirecttoConsumerISUImpulseSubscriptionUpgradeROIReturnonInvestment
AGBAGBNielsenDTT
DigitalTerrestrialTransmissionIPLIndianPremiereLeagueRRRemoteRecord
AMSAudienceMeasurementSystemDVD
DigitalVersatileDiscIPPVImpulsePayPerViewRWC RugbyWorldCup
APAllPeopleEBITDA
EarningsbeforeInterestTaxDepreciation&
Amortisation
IPTVInternetProtocolTelevisionSaaSSoftwareasa Service
ARMAdvancedRightsManagementEOL
EndofLifeISUImpulseSubscriptionUpgradeSANZAR
SouthAfrica,NewZealandand
AustraliaRugby
ARPUAverageRevenueperUserEOYEndofYearKPIKeyPerformanceIndicatorSBOSKYBoxOffice
ASOAnalogueSwitchOffEPG
ElectronicProgrammeGuideLNBLowNoiseBlockConverterSDStandardDefinition
BCUBroadcastCentreUpgradeEPO
EnterpriseProjectOfficeLYRLastYearSIPSessionInitiatedProtocol
BPBookablePromoEPMO
EnterprisePortfolioManagementOfficeMAMMediaAssetManagementSMSSubscriberManagementSystem
BOMBillofMaterialsERP
EnterpriseResourcePlanningMEDMinistryofEconomicDevelopmentSTBSetTopBox
CAConditionalAccessEST
ElectronicSellThroughNASNetworkAttachedStorageSOAServiceOrientatedArchitecture
CAPEXCapitalExpenditureFCF
FreeCashFlowNPATNetProfitAfterTaxSSOSingleSignOn
CBACostBenefitAnalysisFGF
FriendgetFriendNRLNationalRugbyLeagueSVODSubscriptionVideoonDemand
CCIConsumerComfortIndexFTA
FreetoAirNZOANewZealandOnAirTCLTelstraCLEAR
CDNContentDeliveryNetworkFTE
FullTimeEquivalentODOnDemandTSRTierStructureReview
CMSContentManagementSystemGDP
GrossDomesticProductOMPOnlineMediaPlatformTVNZTelevisionNewZealand
CPIConsumerPriceIndexGE
GeneralEntertainmentOPEXOperationalExpenditureTVODTransactionalVideoonDemand
CPSCentsperShareGST
GoodsandServicesTaxOSBOutsideBroadcastUFBUltrafastBroadband
CPVHCostperViewerHourGUI
GraphicalUserInterfaceOTTOvertheTopUHFUltraHighFrequency
CRMCustomerRelationshipManagementHD
HighDefinitionPANPanoramaRoadUIUserInterface
CSRCustomerServiceRepresentativeHDR
HighDynamicRangePMOProjectManagementOfficeUXUserExperience
CSSCustomerSelfServiceHDTV
HighDefinitionTelevisionPPVPayPerViewVDSL
VeryHighSpeedDigitalSubscriber
Line
CWGCommonwealthGamesHTS
HybridTelevisionServicesPOCProofonConceptVFNZVodafoneNewZealand
DDSDynamicDecisioningSystemIBC
InternationalBroadcasterCentrePOPPointofPresenceVODVideoonDemand
DMDirectMarketingIBMS
IntegratedBroadcastManagementSystemPS3Playstation3WFMWorkForceManagement
DRDisasterRecoveryICC
InternationalCricketCouncilPSB PublicServiceBroadcastingYOYYearonYear
DRMDigitalRightsManagementIDTV
IntegratedDigitalTelevisionPSPPlaystationPortable