SoHo Slow to Show Dough

Sky TV doesn’t expect its new premium drama channel, SoHo, to break even for at least another 18 months.

Chief executive John Fellet says it’s “the most expensive channel” the satcaster has launched and could take up to two years to turn a profit.

He was defending Sky’s decision to charge subscribers $10 a month, be they basic or HD subscribers, to access the HBO-style channel from December 1.

At one stage it looked as if Sky would use the Rugby World Cup to launch two HD channels: one that was programmed in-house (SoHo) and another that was an upgrade of an existing SD channel.

But Fellet says SoHo is so big an undertaking that Sky will be spending the next three-to-four months bedding it in and analysing its performance before contemplating any other HD options.

However, he rules out any of the news or documentary channels as contenders.

“Around the world, documentary HD channels don’t get the eyeballs you would expect.”

He believes another HD movie channel is more likely to be rolled out next – a move that could see Sky start to “genre-cise” channels along the lines of drama, comedy and action.

Fellet’s own personal preference would be for an HD sci-fi channel.

It’s been under active consideration for the last four-to-five years and although there’s a sci-fi channel in Australia, free-to-air rights entanglements have made it impossible to clear enough content for Sky to offer much of a schedule beyond Star Trek re-runs.

In the meantime, Fellet expects SoHo to be among Sky’s strongest-rating channels and acknowledges that charging for it will impact on subscriptions for other premium channels, most notably Rialto.

“Any time we add a channel we enlarge the marketplace but also cannibalise existing content. Everyone has a fixed amount in mind they are prepared to pay for TV.”

At the same time, adding SoHo enables Sky to dangle new carrots before prospective subscribers: its latest free basic digital installation deal includes free access to SoHo during December.

It’s also another means of making more money from an existing HD subscriber base that is starved for HD content — yes, the market dynamics are different but Kiwis are entitled to feel frustrated with only 10 HD channels to choose from on Sky when BSkyB in Britain offers more than 50, including its version of SoHo, Sky Atlantic, at no extra cost to HD subscribers.

Meanwhile, today’s NZ Herald reports Sky is in “advanced talks” with Telecom and TVNZ to launch a Sky-lite digital terrestrial TV service that would offer pay-TV packages of a dozen or so channels for about $25 a month.