Disintermediation of the Media Sector continues
The key assets of Rupert Murdoch’s 21st Century Fox include the vertically integrated Fox movie, pay TV, and the free-to-air TV franchise in the US and pay TV businesses in Europe – Sky Deutschland (54.5%), Sky Italia (100%) and BSkyB (39%).
Their 44% shareholding in the New-Zealand-based SKY Network was sold in March 2013 for NZ$815m.
The Murdoch formula is to control major sports broadcasting rights, such as the Bundesliga, Serie A or English Premier League.
Coinciding with the formal split between 21st Century Fox and the “new News Corp”, SKY Network lost broadcasting rights for the English Premier League to Coliseum Sports Media.
Acquired for three seasons, Coliseum Sports Media will deliver 380 games of Premier League football per season on a dedicated online platform, with pricing at NZ$150 for an annual subscription.
The delivery platform utilises the same technology as that used in the US by the National Football League (NFL) and the National Basketball Association (NBA).
Investors should be aware the disintermediation of the media industry continues from print to free-to-air television to pay TV. The advertising dollar is less sticky and there is greater competition amongst the subscription business models.
Examples of video on demand and the loss of major sports broadcasting rights to an Internet-based platform provider heightens the risk around content, platform competition and disaggregation.
Chief Executive Officer of Montgomery Investment Management, David Buckland has over 30 years of industry experience. David is a deeply knowledgeable and highly experienced financial services executive. Prior to joining Montgomery in 2012, David was CEO and Executive Director of Hunter Hall for 11 years, as well as a Director at JP Morgan in Sydney and London for eight years.
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