Sky TV is celebrating a court win against My Box, the streaming service that advertises its ability to play Sky’s content for free.

The Auckland High Court ruled that My Box cannot describe its service as legal. It confirms that using its hardware and software to show Sky-owned material is a breach of copyright.

The court will hold a hearing to decide costs early next year.

Sophie Moloney, Sky’s general counsel says: “This decision, along with the recent ruling against Fibre TV boxes in Christchurch, sends a very clear message to New Zealanders that these services are not all they are cracked up to be.”

Sky’s roundabout victory

What’s curious about this case is that Sky didn’t manage to win a straight legal victory over video piracy. It took action against My Box and the company owner Krish Reddy under the Fair Trading Act.

In effect, Sky’s successful legal argument was that My Box was making claims about its service that were misleading.

This echoes the way US authorities finally managed to nail gangster Al Capone because of his tax evasion, not his more serious crimes.

My Box pirate

What’s pleasing about this case is that Reddy is an out-and-out pirate. This isn’t like a bunch of kids being busted for watching a naughty episode of a show that isn’t even available through legitimate entertainment channels. It’s not like someone bittorrenting a missing episode or using a VPN to watch BBC coverage.

Sky has a far better moral argument here.

Reddy may not be a gangster, but his My Box business is copyright piracy on an industrial scale. He claims to have sold 17,000 boxes.

While you can’t argue that every one of those 17,000 customers would have otherwise subscribed to Sky, it’s clear that Reddy sucked a lot of money earmarked for video entertainment out of an industry that struggles to pay its way.

Last year I received one of the My Box spam emails. Heaven knows how the company got hold of my details. It did come via a long defunct but still forwarded email address.

Wake up call

The fact that it was spam is a wake up call in itself. But the email wasted no time telling me that I could get content for free without paying a Sky subscription. It looked crooked.

Piracy is in decline. There’s less need to steal content when it isn’t expensive to buy from the likes of Netflix or Lightbox.

Even sport, which comes with more of a premium price tag, is affordable for most New Zealanders. At least in relative terms. A year-long subscription to Bein Sport NZ or Sky Fanpass is roughly a couple of days pay for someone on a minimum wage.

Sky is My Box’s most obvious victim. In a way so are the people who paid the company money and believed they were getting legitimate access to streaming video services.

In theory, any customer would have a good case to demand their money back. I suspect they, like Sky, will find there are few if any assets left in the business.

Many recent phone launch presentations have been all about the camera. Most of the rest spend more time talking about their phone cameras than anything else. I can’t think of a single phone presentation I’ve seen in the last three years where the camera was relegated to a footnote.

Apple, Samsung and Huawei all want you to know their phone cameras are better than before. It is always true.

They’d also like you to think their cameras are better than their rivals. That’s a losing game. They are all excellent. But each excels in different ways.

You wouldn’t be disappointed with the camera in any premium phone. You might find one phone misses a camera feature you’d like, or is a touch weaker in some department. You might find one suits your style, works the same way you do or has a user interface that’s easier to understand. Either way, they are all good.

Apple iPhone XS camera

Phone cameras good, getting better

Indeed, phone cameras are now exceptionally good. So good that the stand alone camera market looks doomed for everyone except professionals and serious amateurs willing to part with lots of money.

Forget whinging about a NZ$2800 phone, the starting price for a full frame mirrorless camera from Sony, Nikon or Canon is about twice that. And then you buy extra lenses.

The low-end camera market is already dead. The mid-range is struggling. There is almost no casual stand-alone camera market these days.

It’s still worth buying a standalone camera if you want consistent great pictures

There are good reasons to buy a high-quality standalone camera if you want to take great pictures.

The physics of camera optics means that, in general, you get better images with a bigger and better lens along with a big sensor array. You also need some distance between the lens and the focal plane where light hits photosensors.

None of this is possible in a phone which is often less than 10mm thick. Phone cameras have small lenses. There is almost no distance between the lens and the sensor array. Sensor arrays are also small, usually smaller than a fingernail while a more traditional digital camera might have an array the size of a matchbox.

Phones have plastic lenses, which, on the whole, are not as good as the glass lenses in cameras. Plastic can distort images. Phone makers spend millions developing better materials and techniques to reduce this, but glass still beats plastic.

Phone cameras get around physical shortcoming with heavy duty computer processing. Upmarket phones have two or even three lenses. They combine their images to create better pictures. Most of the time this gets around the distortion.

Software does the heavy lifting

They do a hell of a lot of this in software. Which brings up an interesting philosophical point: Are they capturing reality or are they making it up?

You may wonder why phone makers keep putting faster and faster processors in their phones. After all, none of the last three or four generations of flagship phones have been slouches when it comes to handling most computing tasks.

The main reason for the extra grunt is to handle image processing. It’s a data-intensive task and phones have to do it in microseconds.

Phone makers love to tell you their models use artificial intelligence. Most of the time phones use the results of earlier AI work to inform their brute-force image processing. They don’t do on-the-fly artificial intelligence to process your pictures.

The results are impressive. When Apple gave me a demonstration of the iPhone XS Max, I was struck by how much like a digital SLR the results can be, in the right hands.

As much as I try, my iPhone or Huawei shots are never as good. I still get far better results from my ageing but trusty digital SLR. The pictures are often good enough to use in print.

Mirrorless

If I was to buy a new camera, I’d go for a modern mirrorless design. Until recently this would have meant a Sony Alpha, but Nikon and Canon now have tempting alternatives. I can’t put my finger on it, but to my eyes Canon images look better, so the Canon EOS R would be my probable choice.

Mirrorless means the camera doesn’t have a traditional optical viewfinder like an SLR or digital SLR. Instead you see the same image that the sensors see. This makes the cameras simpler, smaller and lighter.

For consumers stand alone cameras are on a path to becoming a retro-tech thing like vinyl records or analogue music synthesisers. Professionals will go on using standalone cameras. But the market is slowing.

I still take a camera along when I travel overseas or cover a conference as a journalist. The more traditional controls easier to use, even if I spend most of the time on automatic setttings. When I need to fiddle, it’s easy to tweak dials and press buttons than hunt for controls on a phone screen.

Having said that, often I find myself on a reporting job where the only camera to hand is my phone. If I take a little time, I can get good pictures with that too. I’ve already noticed I’m less likely to pack the standalone camera when heading out to cover a story. I no longer keep it handy, charged and ready to go. That’s not the case with my phone.

Neilsen says New Zealanders buy almost five million hard copy books a year. Meanwhile the Book Depository says out of the 160 countries it sell to, New Zealand is second only to Australia. We are ahead of the UK and the US.

These numbers come from a media release put out by the Book Depository. This may not seem remarkable, but the Book Depository is owned by Amazon.

The shopping giant may have started out as an online bookshop, but it has poured millions into developing the e-book market. Amazon still sells its own Kindle brand of ebook reader; the most popular standalone reader.

books
Book shelves still growing

In other words, the world’s largest retailer of ebooks is happy to let everyone know that hard copy is still more popular with readers.

Scratch the surface and it seems the e-book market topped out about a decade ago. It hasn’t grown significantly since then. Meanwhile hard copy book sales continue to climb.

As far as it can go

I wouldn’t say this means Amazon has thrown in the towel on e-books, but it seems the market has gone as far as it is going to for now and hard copy sales are rising. Hard copy books have some practical advantages over e-books.

Neilsen’s New Zealand specific market research found 80 percent of people in this country only read hard copy books. A mere five percent only read digital books. The rest read a mix of the two.

Books are still popular online. Almost 600,000 New Zealanders bought a book from a website in the last year.

Book Depository says orders to NZ have climbed 45 percent in the past three years. Although this might be because buyers are switching from other sources both online and offline. Still 45 percent represents significant growth, remember e-book sales are static.

A third of the books sold here by the Book Depository are for children. So the next generation is already invested in print rather than digital.

Part of this could be parents wanting to prise kids away from digital devices for a few moments, but there’s also more pleasure in reading a hard copy book together than sharing a screen.

Books expensive in New Zealand

I suspect one reason New Zealanders are enthusiastic online book buyers is because prices are far higher than elsewhere in the world.

This is particularly true for popular fiction books which are often discounted in large stores overseas. In some cases we pay more than twice the price paid by UK or US readers.

There are a few crumbs of comfort in this for local bookstores. While huge sales are going to offline online booksellers, the fact that readers continue to buy hard copy books in such large numbers means there is still a worthwhile market here. It’s doubtful that books will die in out lifetimes. Whether they can compete on price is another matter.

It’s no coincidence Sky TV reported a $240 million loss days after Spark won the Premier League Football rights. A thread connects the two news stories.

Spark is New Zealand’s rising media power. Sky is still number one, but fading.

You can’t blame Sky’s problems on Spark’s football win. The traditional pay-TV company hasn’t owned Premier League rights for five years now. Yet the move underscores the shift from old school television technology to streaming media.

Football key to sport portfolio

The English Premier League joins Spark’s growing TV portfolio.

The telco, yes Spark is still mainly a telco, also has the local rights to Manchester United TV. On the team’s current form that may not be much to write home about. Even so it’s a sound investment. United is the best know and most followed English club outside of the UK.

Spark says it plans to wrap the two football deals into a new standalone sports media business. Spark already has the rights to next year’s Rugby World Cup.

The company has hinted there is still more to come. Sky TV doesn’t have the clout, or the money, it once had. So Spark has an opportunity to prise other popular sports away from the incumbent. If nothing else, New Zealand Netball and Cricket must be possible candidates. And perhaps various motor sports.

Sky FanPass

This is not great news for Sky. But there are chinks of light among the dark. The pay TV broadcaster cut a deal allowing Spark to resell its FanPass service.

Fanpass is now another small, but nicely done plank in Spark’s sports media portfolio. It also means Sky gets to tap a market that it has previously struggled to reach.

Let’s not forget LightBox. Spark’s streaming TV operation may be a pale imitation of Netflix, but it’s a useful value-add for Spark’s broadband business.

Another useful add-on for Spark is that it offers cut-price Netflix to customers signing for long broadband contracts.

Sticky TV

All-in-all Spark already has enough media properties to keep viewers glued to its broadband services. And that’s a critical part of the company’s TV-over-internet strategy: customers who buy a bundle of services are less likely to decamp to a rival broadband service.

Premier League football isn’t New Zealand’s most popular sporting code by a long shot. However, it has particular value for Spark. First, it tends to be watched by relatively well-heeled fans who are willing to pay a couple of hundred dollars or so for a year’s worth of games.

Second, Premier League fans are well used to watching games using streaming. It was the first major sporting property to be picked up by a digital organisation. That was Coliseum Sports Media which had the rights from 2013 to 2016. Spark works in a partnership with Coliseum before BeIn Sport won the rights.

Overseas moves

In a media statement Spark managing director Simon Moutter say his company developed its plan after looking at overseas sports content media moves.

He says: “We’ve carefully considered the different models and will be looking to replicate the good things other businesses have done and learn from the challenges they’ve had — all the while thinking carefully about how sports media fits in a New Zealand context”.

Spark says it will launch its own sport ‘platform’ early in 2019 and will annouce pricing and package deals closer to the launch.

Latch

Spark Sport head Spark hired Jeff Latch to head the Spark Sport operation. He will oversee buying more content rights and will take charge of the ‘platform’. Latch was previously director of content at TVNZ. In that role he was in charge of buying content, including sport. Spark is partnering with TVNZ for the Rugby World Cup project.

Latch says Spark will work with a specialist sports-streaming company. He says the platform used will be different from the one used by Spark’s Lightbox service.

He also said Spark intends its sports media operation to work as a standalone business and not be used merely as a way to woo broadband or mobile customers. To a degree this is what Spark has done with Lightbox.

Netflix close to two million NZ viewers

Had Sky merged with Vodafone it may have fought off the challenge from Spark, although that’s far from certain. Yet nothing could protect Sky from its other threat: Netflix.

Roy Morgan research says Netflix now has nearly two million viewers in New Zealand. The service saw subscription numbers grow 35 percent in the last year to reach 1.9 million viewers. The research company goes on to report:

“Now over three million New Zealanders have access to some form of Pay or Subscription TV, up 13.9 percent on a year ago. The growth in Pay and Subscription TV is being driven by the likes of Netflix along with a suite of rival streaming services including Lightbox, Sky TV’s Neon and Amazon Prime Video.”

Viewer numbers are growing slower for Sky TV’s Neon service. It was up 1.7 percent in the year to reach a total of 1.6 million viewers. Lightbox is the second most popular video on demand servide with 830,000 users. That’s up 43 percent on last year, growing faster than Netflix. Vodafone TV has 295,000.

Ben Brooks gets close to the heart of the problem with pay walls when he writes Subscription Hell. It’s hard to make money from pay walls.

The only online sites that do well are those like New Zealand’s National Business Review or The Economist. Both serve well-heeled audiences with unique, quality content readers can’t get elsewhere.

Brooks makes two interesting points.

First, differentiation. Brooks is thinking about podcasting, but it applies to all online media. In essence he says there are thousands of undifferentiated podcasts chasing the same audience.

…but will they pay?

The implication that no-one will pay to listen to one of the podcasts when there are dozens of free alternatives. You could say the same about most online media. This, in part, does not apply to pay wall successes like the NBR and The Economist. Their audiences don’t have obvious alternatives.

The other point is subtle. Brooks makes the connection between people paying for apps and buying pay wall subscriptions.

On the surface these are two quite distinct markets. And yet, recently I was thinking about exactly this concept from the opposite point of view. I have a number of subscriptions to pay each month. Some are for apps or online services. Others are for, it’s not the best word to use, but let’s go with it: content.

Pay wall, subscription software: two aspects of the same thing

In my budgeting, I see the two as aspects of the same thing. I allow myself so many dollars a month for subscriptions. It’s a single pool of money to cover things like cloud storage, online music, movie downloads, pay walls, apps and services. What isn’t spent on  apps is available for media. What isn’t spent on online media can be spent on apps.

A decade ago the budget was zero. It’s not zero today. While it isn’t a huge amount of money, it’s about the same as I spend on coffee. It may grow larger in the future.

The issue is, consciously or not, people only budget so much money for subscriptions. I have a limited pool of funds. So does everyone else. The world has a limited pool of funds for subscriptions. On a world scale it is huge and still growing. Even so, there is not enough to go around for everyone who would like to earn money selling pay wall subscriptions or apps. Too many sellers, too few buyers.

And there’s the problem. It’s not hopeless. Services like Press Patron (see the red button at the foot of this page) offer a way out. People can choose to set their own amount to pay. If you go back to my budget approach, if I don’t buy software one month, I can flip a few bucks into someone’s Press Patron.

But it’s difficult. The market for content pay walls or subscription software is not infinite.