Sky and Three Deal Could Transform Media Landscape, Boost Local Content Production

There’s a new chapter unfolding in New Zealand’s media industry, as Sky TV has acquired free-to-air television channel Three and its associated platforms, with control set to take effect by next Friday. The deal has sparked excitement and speculation about the future of local content, competition, and the overall media landscape.

On the latest episode of The Front Page, host of The Fold podcast for The Spinoff, Duncan Grieve, discussed the implications of the acquisition. He noted that while the move was expected, it could bring much-needed dynamism and competition to an industry that has long been dominated by TVNZ.

“I think this industry needs some dynamism and needs a level of competition. Three and Sky just make sense together,” Grieve said. He emphasized that TVNZ has long held a commanding position in both audience share and advertising revenue, with a reported $300 million in advertising revenue compared to Three’s $100 million.

Sky New Zealand CEO Sophie Moloney confirmed that there will be no immediate changes to the programming line-up over the next 12 to 18 months. However, she hinted at the potential for increased investment in locally-made content, provided it is financially viable.

“We think we need more commissioned content here as well, as long as it makes sense and we can make money from it, of course. But, we think there’s a great opportunity in bringing these two entities together,” Moloney said.

Grieve pointed out that Sky already produces a significant amount of local content, particularly in sports, which is often overlooked in discussions about local programming. “They also, through New Zealand On Air and some other commercial partnerships, make some local content as well, but not nearly so much as the likes of TVNZ, for example,” he noted.

He also highlighted that Three has significantly reduced its local content production in recent years. “It used to have multiple news bulletins; now it just has one. It doesn’t make it itself — Stuff manufactures that for them,” Grieve said.

In the past, TVNZ has acquired some of Three’s most popular shows, including Home and Away, Grand Designs, and Graham Norton’s talk show. However, Grieve suggested that these losses were often the result of poor negotiations by Three, rather than a deliberate strategy.

“In this situation, I think it’s less about Three defending what it has — and it still has a lot. David Lomas Investigates is still a very beloved property for them. Married at First Sight Australia regularly tops the ratings. They’ve got their licence to operate The Block... They do have a strong and proud history, basically comedy and reality TV, as locally made genres were largely driven strategically by Three,” he said.

Grieve believes the real opportunity lies in combining Sky’s vast library with Three’s existing platforms. “If you look at the vast library that Sky has, truly it’s one of the best in the world. It might be the best in the world just because we’re a small market with fewer pay TV operators across sports, entertainment. What it can do, in terms of putting a sampling of that on Three, and then using that as the top of the funnel to say, if you like that, there’s a whole lot more where that came from across Sky’s properties, and then advertising that there once that’s all properly put together strategically understood and executed, that should be a pretty formidable machine for them, setting aside the whole advertising piece of it,” he said.

With the acquisition, the media landscape in New Zealand could see a shift in power dynamics, potentially leading to more investment in local content and a broader range of programming for audiences. As the deal progresses, the industry will be watching closely to see how this new alliance shapes the future of television in the country.

The Front Page is a daily news podcast from The New Zealand Herald, available to listen to every weekday from 5am. The podcast is presented by Chelsea Daniels, an Auckland-based journalist with a background in world news and crime/justice reporting who joined NZME in 2016. You can follow the podcast at iHeartRadio, Apple Podcasts, Spotify, or wherever you get your podcasts.