BSkyB announced increased losses in today’s interim results as the costs of marketing and programming digital services took its toll. For the three month period to the end of September the satellite broadcaster announced pre-tax losses of £123.6m, compared to £13.6m for the same period last year.
Digital sales have now reached 4.95m, however, with just over 4m taking up the services, and the group is on target to reach its 5m subscriber level by the end of 2000. Tony Ball, CEO, said, “Reaching our 5 million target ahead of schedule is a fantastic achievement. We are confident that we are on course to achieve our target of 7 million subscribers by end of 2003.”
The churn rate was down at just 9.8% across the year, compared to 14.2% last year. Higher rates of churn have dogged other digital subscribers in recent months, as the ability to retain customers has increased in importance (see NTL Expects To Exceed Digital Subs Of ˝m By Year End), but Ball said this was ceasing to be a problem at Sky.
“In the last year we added more than a million DTH subscribers with growth in the last quarter at record levels. And as people switch to Sky Digital, our low churn level shows they are staying with us,” he said.
The urgency for ITV to join the digital satellite platform is becoming more apparent as Sky’s share of viewing within its digital homes took over that of ITV in the same homes for the first time. Sky own share of viewing averaged 19% compared to 17.3% for the ITV network.
Revenues were up 33% to £520m and the group confirmed anticipated price increases for its digital services (see Digital Packages Set To Increase In Price). Marketing costs increased by £28m to £104m across the period due to higher digital additions, and the cost of programming increased by £60m to £251m as subscriptions rose.
The group’s takeover of Open (see BSkyB Takes Control Of Open, Plans To Improve Look, Feel and Services) is, as yet, not fully consolidated within the company, but new media revenues were reported separately for the first time, driven primarily by internet and telephone betting revenues from the acquisition of Sports Internet Group earlier this year (see BSkyB Signs Sports Internet Deal As Digital Expansion Takes Its Toll).
BSkyB: 020 7705 3000
