Sharewatch: BSkyB Plummets Following Subscriber Slowdown

BSkyB led a downturn in the media market yesterday, losing a massive 18.94% from its share price to close at 488p, a loss of 114p in real terms, following news hat the satellite broadcaster had failed to meet its subscriber figures.

The company revealed that profits for the year ending 30 June 2004 climbed by a staggering 65% to £600 million, but subscriber growth fell woefully short of the firm’s 100,000 per year target at 81,000. However, chief executive James Murdoch unveiled an ambitious plan of increasing direct-to-home subscriber figures from the current number of 7.4 million to 10 million by 2010 (see Sky Profits Rocket Despite Slowing Subscriber Rates).

Elsewhere, ITV suffered dip of 0.49% to close at 102˝p. Yesterday the company unveiled plans for its third digital television channel, targeted at older viewers ITV3 will launch in November as a free-to-air offering showcasing Hollywood movies and classic dramas such as Cold Feet and Inspector Morse (see ITV3 To Launch As Free-To-Air Offering In November).

One of the few companies to break the trend of decline amongst media stocks yesterday was consumer magazine publisher Highbury House Communications. The company managed a rise of 8.93% to 15źp and recently forecast a rise in pre-tax profits for the first six months of 2004 (see Highbury House Profits Expected To Rise By 27%).

The FTSE 100 was dragged down by BSkyB’s performance, along with declines due to lack of confidence amongst other major media stocks. The market lost 0.5% yesterday to close at 4,408.1, while the FTSE 250 closed down by 1.2% at 5,951.8.

The closing prices of media company shares on Wednesday were: