Another gratuitous knock at SKY TV

By John Nixon 05/07/2010

The tall poppy syndrome is seemingly alive and well in New Zealand.

I was surprised to read the following headline today:
’Sky’s hold on TV content worries telcos’

The full article can be found at:

The author falls into the trap of deducing that TV must be distributed as IP packets over a fibre network. This is not true and a far better, simpler and cheaper way of distributing TV, including Freeview and SKY is by using Video overlay or a third ITU standard wavelength (1550 nm) on the single fibre to the home.

SKY has tendered for and paid a lot of money for the rights to distribute much of their programming. Their satellite delivery (DTH or direct to home) has brought TV to many remote homes and areas that would otherwise not receive terrestrial TV broadcasts.

Murdoch and Newscorp Ltd do not control SKY TV NZ. They have a minority shareholding in the company which is publicly traded. SKY only turned it’s first profit after 12 or 13 years of operations in New Zealand.

Why would SKY give over the programming that they have invested in to assist Telcos unless there was a clear profit motive for them?

I just returned from Fibre and Communications conferences in Korea and Singapore. Interesting information concerning IPTV was gleaned from some of my European-based contacts there.

For instance Deutsch Telecom built an IPTV master head-end which reportedly cost the princely sum of €3 Bn (yes, three billion Euros!). I’m not saying it would cost that much in New Zealand, but it is a very expensive exercise.

Orange in France employs 300 full-time staff to manage their IPTV head-end.

So between the existing DTH satellite system and Video overlay for FTTH, there is no need to convert SKY’s transmissions to IP, nor Freeview’s for that matter. IPTV is complex and costly to implement and simply hogs the data channel on FTTH.

Inversely video overlay is extremely inexpensive and simple and can potentially offload several Gbps from the fibre data channel.

Close to home, TransACT in Canberra ( has just decided to extend their video overlay TV service coupled with their FTTH offerings in that city. I was pleased to be involved in the technical discussions with TransACT.

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