Sky Confident Subscriber Rise Can Quash Freeview
Yesterday’s announcement by BSkyB of massively increased subscriber figures was coupled with chief executive James Murdoch’s dismissal of Freeview as a threat to the company’s dominance, as Sky enjoyed its strongest quarter since 2002.
Sky’s subscriber base now represents almost a third of homes in Britain, and while Freeview has seen staggering growth in recent years, it still languishes at 15.8% of the population.
Murdoch believes that Freeview homes are not a threat to Sky, as ultimately they behave in the same way as analogue terrestrial viewers behave. In a report in the Guardian, Murdoch said: “[Analogue customers] had not paid for TV before but we managed to acquire them and we manage to acquire them today from free-to-air customers as well as from pay competitors.”
He added: “Freeview is more about routes to the market. Clearly its very, very strong digital receiver sales in the Christmas quarter did not impact our ability to have our strongest quarter for two years”
The BSkyB boss remained confident yesterday that the company would hit its target of 8 million subscribers by the end of the year, going on to claim that a further target of 10 million by the end of the decade also looked attainable.
In addition, Sky hopes to have signed 25% of its customers up to its Sky+ PVR system by 2010, expanding its current subscriber base of 646,000 to a massive 2.5 million. Just 8.4% of Sky customers currently subscriber to Sky+, costing customers £99 for the equipment on top of a monthly channel package.
However, a number of developments in digital TV could hamper Sky’s progress over the coming years, with digital cable providers Telewest and ntl increasing their efforts to compete with the satellite superpower. Both companies have begun to roll out on-demand services, while Telewest has developed an own-brand personal video recorder (PVR) to compete directly with the premium Sky+ system (see Telewest Targets Sky With PVR Set-Top Box).
In addition, the new Telewest set-top box is capable of receiving high-definition TV (HDTV) content in the future, a technology which Sky is also preparing to roll out, delivering a significant improvement in picture quality compared with today’s standard-definition digital TV broadcasts, especially on larger screens.
Murdoch has claimed that the technology drew “audible gasps” from media executives at a demonstration screening, stating: “It’s going to be dynamite. We’re really, really excited about pushing it.”
Meanwhile, the Freeview platform continues to expand, with broadcast firm Crown Castle recently putting space for another channel on the platform up for sale. The company accepted sealed bids from a number of broadcasters, believed to include Channel 4 and ITV, with speculation suggesting the airspace could be worth over £7 million (see Crown Castle Puts New Freeview Channel Up For Grabs).
Further competition to Sky’s digital dominance could come in the form of TV via broadband, with an increasing number of companies investing in the technology. London-based HomeChoice recently announced plans for expansion outside the M25 area for the first time, as well as revealing a 15,000 increase in its subscription base (see HomeChoice To Double Coverage With Expansion).
The HomeChoice system is currently the nation’s only large scale on-demand broadcaster, although companies such as BT are eager to develop similar services, offering customers a mix of on-demand movies, music and TV content through their phone line, along with conventional broadband internet services. BT is currently considering building on the existing Freeview platform with specially adapted set-top boxes in order to provide a ready-made customer base (see BT Boards On-Demand Bandwagon With Broadband Services).
BskyB: 0207 705 3000 www.sky.com BT: 0207 469 2337 www.btplc.com Freeview: 08708 80 99 80 www.freeview.co.uk NTL: 01256 752000 www.ntl.com Telewest: 0845 142 0000 www.telewest.co.uk
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