As video-on-demand (VOD) services continue emerging as the platform of preference amongst television viewers, New Zealand residents will soon have access to an outstanding range of content from one sole service with Spark (ASX: SPK) entering an agreement to sell Lightbox to broadcaster Sky Network Television (ASX: SKT).
The agreement will see Sky merge Lightbox with their existing streaming service, Neon, which will undergo a transition period through the first half of 2020 – pending approval from regulators.
“With the increasing arrival of the mammoth global players in the New Zealand market, the purchase of Lightbox allows Sky to offer an enhanced, highly appealing and competitive entertainment service, delivered by kiwis to kiwis,” said Sophie Moloney, Sky’s Chief Legal, People and Partnerships Officer.
“We will partner with fellow New Zealand companies, including Spark as telco partner, to offer the new enhanced entertainment service to as many New Zealanders as possible.”
Financial terms of the deal remain confidential with Spark to continue running Lightbox until the end of the transition period, but Sky to cover all operating costs.
“In the last five years, there has been significant growth and evolution in the subscription video on demand (SVOD) market. Selling the Lightbox business to Sky ensures a sustainable future for Kiwi SVOD services, while giving us the ongoing ability to provide access to a high-quality TV and movie streaming service, which benefits from a significantly enhanced range of entertainment content from Sky,” said Spark Managing Director, Matt Bain.
Upon divestment of Lightbox, Spark will advance their telecommunications network with plans to roll out their 5G network into New Zealand’s major commercial centres from March 2020 whilst Sky turns their attention to the 2010 Olympic Games in Tokyo where they will stream coverage across 12 HD channels and Neon/Lightbox.
In FY19, Sky reported 16% growth in streaming and commercial revenues.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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