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BSkyB Restructures Pricing Scheme To Boost Sky Plus

BSkyB is believed to be planning to restructure its pricing scheme in an attempt to increase the number of people buying its Sky Plus service and boost its revenue per user 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, which allows viewers to watch one satellite channel while recording another, pause live programmes and skip through commercial breaks.
The Sunday Telegraph claims that BSkyB chief executive, Tony Ball, is planning to scrap the £120 a year Sky Plus subscription fee for customers spending £30 a month or more on its premium channels, in an attempt to increase Sky Plus subscribers to 300,000 by the end of June next year.
It is understood that the subscription fee was seen as a disincentive to subscribers trading up from basic packages to premium channels such as Sky Sports 1 and 2, Sky Premier and Sky Moviemax. Under the new initiative customers will 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 an average revenue per user of £400 a year by the end of 2005. It should also help to reduce churn and make customers more likely to buy additional channels.
Earlier this year Ball 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 PVRs Could Be The Next Killer Application For BSkyB).
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 (see BBC Should Sell Its Most Popular Programmes).
Sky insists it is now highly confident of reaching the target of 7 million customers by the end of the 2003 calendar year (see BSkyB Results Beat Market Expectations As Subs Hit 6.8m). 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.
BSkyB: 0207 705 3000 www.sky.com
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