Sky Television has agreed to buy Spark's Lightbox streaming TV service, which it will merge with its own online television entertainment service Neon next year.

Sky chief partnership officer Sophie Moloney said the joined service would combine "all of the best features of Neon and Lightbox".

It had yet to confirm what the combined service would cost, and whether it would use Lightbox or Neon's technology.

"We will announce details of the new service in 2020, including what it will be called, the full suite of excellent content, features and pricing options," Sky spokeswoman Kristy Martin said.

Neon is currently priced at $13.95 a month, while Lightbox comes in standard and "premium" versions costing $12.99 and $15.99. Neither require customers sign up to a contract.

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Neon's programming includes movies, and gritty US dramas popular on Sky's SoHo channel.

Lightbox has had a more eclectic content mix stemming from its early focus on European shows, but has snagged some big hits, including The Handmaid's Tale and Castle Rock.

TOM PULLAR-STRECKER/STUFF Lightbox and Neon to merge as Sky buys the streaming service from Spark.

Moloney said there would be a transition period once the deal was completed, during which Lightbox and Neon customers would "continue to enjoy their respective services in the same way they do now".

Spark spokeswoman Ellie Cross said people who subscribed to Lightbox directly would then be automatically switched to the merged service.

She could not comment on whether customers who had an automatic payment set up to pay for Lightbox could be assured their bill would not rise, saying that was hypothetical.

Customers who got Lightbox "free" as part of a Spark bundle would continue to do so at least until the services were merged.

"After the transition period is completed, we are intending to partner with Sky so that the combined streaming entertainment service is available to customers through our broader entertainment offers on broadband and mobile."

But she could not confirm that would be at no new cost.

SUPPLIED Elisabeth Moss as Offred in The Handmaid's Tale, one of the hit shows on Lightbox.

Moloney said that with the "increasing arrival of the mammoth global players in the New Zealand market", the purchase of Lightbox would allow Sky to offer an "enhanced, highly appealing and competitive entertainment service".

Spark marketing director Matt Bain said it was pleased to have found an ongoing home for Lightbox.

"Following completion of the deal, we'll be working closely with Sky to ensure that all existing Lightbox fans have a positive experience through this transition period, and we look forward to partnering with Sky to offer the enhanced new service to Spark customers."

The sale price was confidential and the deal is subject to "commercial, legal and regulatory approvals".

Rumours of the deal emerged last month.

Spark announced in March that it had begun a formal process to select a "growth partner" for Lightbox, which has competed with Neon.

It said then that Lightbox had 355,000 subscribers, but said Lightbox's continued success would require ongoing investment, especially in content.

Cross said the Lightbox deal did not affect its Spark Sport streaming sports service which Spark was "fully committed to".

Competition between the companies for sports rights is believed to have pushed Sky into forking out more money, reportedly $500m, to re-sign the five-year rights for domestic and All Blacks rugby.

However, the Lightbox deal may increase speculation that the companies could also reach an accommodation on their sports services down the track.

Both Lightbox and Neon, while attracting solid followings, have been eclipsed in the streaming entertainment market by dominant rival Netflix.

Television New Zealand chief executive Kevin Kenrick has indicated the state-owned broadcaster believes the streaming market will become a bloodbath.