Digital Spend Hits BSkyB Profits

Preparations for the launch of its digital satellite service on 1 October have seen annual profits at BSkyB fall by 13.6%. The satellite broadcaster’s increased spend on marketing and sports, along with investment in research and technology, has seen pre-tax profits at the company fall from £313.7 million last year to £270.9 million for the twelve months ended 30 June 1998.

In its build-up to launching Sky Digital, BSkyB has signed programme content deals with the BBC, Channel 4, Channel 5, Flextech, Discovery and Viacom; ITV has refused to let its output be carried on the digital satellite service claiming that it is an entirely terrestrial broadcaster.

In its battle with digital terrestrial (DTT) rival, On Digital, Sky has announced its low-price channel package at £6.99 per month. For sports and film channels the cost will be around £10 more and those who want all 100 or so channels the price will pay £29.99 per month.

Mark Booth, BSkyB chief executive, said: “Sky will introduce digital television to the United Kingdom – digital services at an affordable price will be programming that will appeal to everyone. It will transform the television experience for millions of people and digital will bring a new dimension to the industry.”

Turnover at the company was up 15% year on year to £1.43 billion. Advertising revenue increased by 30% to £195 million. Operating costs rose by around £220 million, accounting for the reduction in profit.

BSkyB: 0171 705 3000