Stanners Would Head Merged Voda-Sky Felt head of media and content reporting to Stanners

Updated. A suggested merger of Vodafone and Sky TV would hasten the unbundling of the Sky programming package, in my opinion. However it seems unlikely any big change will occur in the next 12 months. The first details of the proposed merged firm were issued yesterday confirming that Sky and Vodafone will be retaining their brands. And Sky would not be giving Vodafone exclusive rights to content that is not available to other internet providers, said Sky chief executive John Fellet said that the firm would continue to offer content to other telco’s – even Vodafone’s arch rival Spark. A content deal with 2 Degrees would remain. Fellet told a press conference. The announcement signalled a low key merging of the two companies. But Sky insiders expect the change of culture will be significant.

Rapidly increasing churn and revenue falls announced recently signalled limited time for the current Sky revenue model which includes premium packages of sometimes more than $100 a month. Even if Sky is the party buying Vodafone, its expected Sky would face substantial changes. The bundled model sees subscribers taking a lot of channels they do not need, and adding premium charges for those they do want. It is understood that Sky has looked at an unbundling option based on changes to the Foxtel offering in Australia, but resisted because the loss of revenue would be too significant. Vodafone New Zealand chief executive Russell Stanners has been close to Sky TV chief executive John Fellet for a long time and in the Media world he has been seen as Fellet’s heir apparent, so the negotiations would likely be amiable.

Russell Stanners
Russell Stanners

Staff have openly talked of the Fellet looking for someone to take over when he retires. He has been a part of Sky since it started in the late 1980s. After the exit of Telecom as a shareholder Sky took closer relationship with Vodafone and their interests were kept distinct. Vodafone NZ always resisted moving into the TV business, and Fellet said he had no interest in Sky being a telco. That separation may have been too hard for both companies to resist. Any merger would mean a big change of culture, at Sky TV more than at Vodafone. Should a merger go ahead the issue will be whether Vodafone transfers management from Sky or more likely that brings in new expertise from its global operations where it is already established in media, in my opinion.

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