BSkyB Reports Losses As Digital Subs Reach Record High
British Sky Broadcasting today reported record annual growth in its subscription base, but the cost of its transition to digital continued to create an overall loss. In its full-year results, the group said that over 1 million new subscribers had signed up to its digital satellite service in the last 12 months.
This takes the total number of subscribers to Sky Digital to 3.6 million, with total digital sales at 3.8m, and the broadcaster said it was on track to reach its target of 5 million by the end of the year. Almost 80% of the group’s subscriber base is now digital and a complete transition from analogue will be made at the end of June 2001, a year and a half earlier than expected.
Today’s good news was offset by continued losses, however; operating profit before exceptional items was down 54% at £85 million, due largely to the cost of subscriber acquisition.
Pre-tax losses for the year ending 30 June reached £263 million after exceptional charges of £120 million. The group’s £55 million increase in its share of the losses of British Interactive Broadcasting, gained when the group took a controlling stake in the digital interactive service Open (see BSkyB Takes Control Of Open, Plans To Improve Look, Feel and Services), and it acquisition of a 24% stake in KirschPayTV in April (see BSkyB Moves Into German Pay-TV Market) are blamed for the loss.
Today’s results are an improvement on last year however, when the group recorded a loss of £388 million (see BSkyB’s Financial Results Highlight Investment in Digital). Tony Ball, chief executive of Sky, said: “It has been a year of delivery. A phenomenal digital take up rate has given Sky a substantial lead over its competitors and keeps us on target to deliver 5 million subscriber by the end of 2000.”
He announced plans for the group to extend its services and create new revenue streams through its digital TV and internet platforms. A digital interactive text service, Sky Text, will be launched in October and a WML- based internet browser will eventually be introduced onto each digital set-top box, enabling limited internet access through television sets.
This autumn will also see the launch of personal video recorders in partner ship with TiVo, allowing viewers to personalise their TV viewing (see BSkyB To Bring Personal TV Viewing To The UK).
BSkyB: 020 7705 3000