$5 mil snafu spurs Sky’s Maori offer

Long-awaited web may not bow until March debut

A correction was made to this article on September 1, 2003.

AUCKLAND — Satcaster Sky Television has pitched the New Zealand government a new transmission plan for an ethnic TV channel to avoid costly technical problems for Sky’s digital channels.

Sky installers have mistakenly tuned tens of thousands of subscribers’ set-top boxes into channels allocated to the long-awaited Maori web. It was due to bow before the end of the year but now looks more likely for a March debut, two years after its inception.

It could cost Sky $5 million to send out crews to retune the boxes — so Sky is offering the Maori channel one of its terrestrial outlets.

Execs are keeping their fingers crossed that Maori TV accepts the offer, but the government wants to keep transmission for public channels inside the public sector. The issue is also complicated by political wrangles and the sudden resignation last week of the Maori channel chief executive Derek Fox.

The Rupert Murdoch-controlled Sky recently reported its second profit in 14 years on air and the first since it launched its digital service in 2000.

CEO John Fellet announced upbeat annual results that predicts this year’s $390,000 profit leaping to between $16 million and $20 million in 2004, thanks to increasing subs.

Squeezing Hollywood

This year programming costs rose slightly to $94.5 million. Sky says it has been driving a harder bargain for movie rights out of Hollywood. That is partly because Sky is the only game in town and looks like remaining so for a long time to come.

All the company’s key indicators showed strong gains. Subscriber numbers were up 8% to 543,000 a penetration rate of 39.1% for all households, up from 36.3% a year ago.

The net churn rate fell to a record low of 10.8%.

Sky operates an analog service, which is being wound down. Residential digital customers number 340,000.

Financial officer Jason Hollingsworth says decoder prices had been falling and a strong Kiwi dollar had cut back on installation costs.

But hedging against currency fluctuations means it has not made savings on programming, which is mostly paid in U.S. dollars.