BSkyB is believed to be planning a restructure of its pricing scheme in an attempt to increase the number of people buying its Sky Plus personal video recorder (PVR) service and to boost the company’s average revenue per user (APRU) figures.
Reports suggest that sales of Sky Plus have so far been disappointing, with just 105,000 people buying the integrated video recorder and satellite receiver. The Sky Plus PVR system allows viewers to watch one satellite channel while recording another, as well as pause live programmes and – significantly – skip through commercial breaks.
A report in the Sunday Telegraph claims that BSkyB’s chief executive, Tony Ball, is planning to scrap the £120 a year Sky Plus subscription fee for customers who spend £30 a month or more on premium channels. Ball hopes that this will increase Sky Plus subscribers to 300,000 by the end of June next year.
Under the new initiative customers would still have to buy the Sky Plus equipment for £199 and pay the £50 installation costs.
The new pricing plan is intended to help the satellite broadcaster meet its target of generating APRU of £400 a year by the end of 2005; it currently stands at around £366 (see BSkyB Results Beat Market Expectations As Subs Hit 6.8m). It should also help to reduce churn and entice customers to buy additional channels.
Tony Ball has already said that PVRs would figure prominently in BSkyB’s strategies for future development, as falling hard-disk costs allow the group to market the digital recorders at a price that is more attractive to consumers (see Forecasts).
Speaking at this year’s Edinburgh International Television Festival, Ball also revealed that BSkyB is considering plans to take on the BBC’s Freeview service by offering a ‘Freeview-plus’ style package of channels via digital satellite.
Sky insists it is now highly confident of reaching the target of 7 million customers by the end of the 2003 calendar year. However, Ball said the next stage in the satellite broadcaster’s growth would require a new approach, which could see the launch of a new package including free channels already available on digital satellite, plus a small number of basic add-on channels.
