Sky reports 6% ad revenue decline
BSkyB has reported a 6% ad revenue decline for the year to the end of June, down to £308 million from £328 million in the previous year.
However, despite being down, the satellite broadcaster’s results show it is outperforming the commercial TV market, which was suffered an overall fall of 13%.
The Murdoch-owned company was also pleased to reveal that it is gaining subscribers at its fastest rate for five years, adding 462,000 customers to take its total number of subscribers to an impressive 9.4 million.
Sky said its Sky+ High Definition push and price cuts helped boost its subscriber base and its annual profits, which increased 4% for the 12 months to the end of June.
Jeremy Darroch, Sky’s chief executive, said the company remains on course to hit its target of 10 million customers by the end of 2010.
“We offer customers outstanding value through a combination of high quality products and great value and expect continued growth towards our target of 10 million customers by December 2010,” he said.
However, Darroch warned that the Sky isn’t “recession proof” and said “looking ahead, we expect the overall consumer environment to be challenging”.
Sky announced pre-tax profits of £456 million for the year as a whole, up from £60 million last year.
However, the results were distorted by exceptional charges, which mainly relate to the collapse in the value of Sky’s controversial stake in ITV.
Looking ahead, Darroch said he believes Sky is “well placed to build a bigger and more profitable business in the long term.”
The Sky chief also used the company’s trading statement as an opportunity to criticise media regulator Ofcom’s pay-TV investigation, which has so far ruled that Sky has to lower the wholesale price of its premium content to make it more accessible to rival broadcasters.
Darroch said: “Whilst Ofcom’s pay-TV market investigation remains ongoing, no evidence or argument offered so far alters our belief that there is no proper justification for intervention to require Sky to wholesale its premium channels and to regulate the wholesale price of those channels.
“We will continue to make the case that risk-taking and investment by companies in any sector of the economy should receive a fair reward, and that the commercial value of our channels should not be used as an instrument of policy in order to subsidise businesses which are less efficient or have shown a lower risk appetite for investment in content.”