Sky Pay-TV Subscriptions Reach 8.8 Million
BSkyB has reported its lowest take-up since it became a digital-only service in 2001, now reporting a total of 8.8 million pay-TV customers, with 167,000 net additions made in the last three months of 2007.
This keeps the company on track to hitting 10 million by 2010, but represents a year on year decline on take-up, which was at 183,000 in the same period in 2006.
Sky said it experienced record sales growth of Sky+ boxes, up 16% to 3.1 million households in the UK and Ireland that had the service at the end of September, after unprecedented growth of 434,000. This was a boost of more than 100,000 on the earlier record of 327,000, set in the previous quarter.
The broadcaster added 64,000 high definition subscribers, taking its tally to 422,000 at the end of September. Its Sky Talk telephone business grew by a record 236,000 to 915,000.
BSkyB added 260,000 broadband customers to take its total to 1.2 million.
The company began offering broadband in August 2006 (see Sky Broadband Passes One Million Customer Mark) and bundled it with its pay-TV and phone services to shore up its offering in the face of strong competition from rivals such as Virgin Media and BT.
Sky today reported that its advertising revenue fell by £4 million to £167 million, reflecting that Sky’s basic channels are now not carried on Virgin Media’s cable offering (see Virgin Media And Sky: The Story So Far).
Its advertising share for the six months to December 2007 was up year on year by 0.3% to an average of 14.2%.
Churn, or the percentage of total customers who dropped their subscription, was reduced to 10%.
The company reported a before tax downturn of £36 million for the first six months of its financial year to end December, as the value of its almost 18% stake in ITV fell.
For the second half of 2007, revenues were up 11% to just under £2.5 billion, but operating profit dropped a quarter to a better than expected £295 million.
This did not include the £343 million write down on the value of its stake in ITV to reflect the terrestrial broadcaster’s fading share price at the end of 2007.
Last week the government told BSkyB that it must reduce its stake in ITV from 17.9% to under 7.5%. Business secretary John Hutton accepted the Competition Commission’s recommendation to reduce the stake (see Sky Told To Reduce ITV Stake To Below 7.5%).
The ruling gives Sky until Monday 25 February to lodge an appeal against the decision. The satellite broadcaster said it would “give careful consideration to the announcement and confirm any further steps in due course”.
ITV, meanwhile, said that it warmly welcomed the decision and added that it was in the best interests of the majority of its shareholders.
Jeremy Darroch, the newly installed chief executive of BSkyB (see