Sky Sees Subscriber Increases At A Cost
BSkyB has announced stronger than expected subscriber growth for the third quarter in its interim results this morning, although the cost of attracting new customers has continued to rise.
The satellite superpower notched up net direct-to-home (DTH) subscriber growth of 95,000 in the quarter, a rise of 29,000 on the corresponding quarter of last year, which saw 66,000 new customers subscribe to its channel packages.
The increased customer base exceeds analysts’ forecasts, with a recent AFX News poll of 5 leading brokers predicting that the broadcaster would attract between 60,000 and 90,000 new subscribers in the three month period.
Sky believes it will hit its target of 8 million subscribers by the end of the year, with its current total exceeding 7.7 million. However, the company’s marketing costs in the nine months to 31 March have increased by £80 million, pushing its total spend to £379 million, representing 13% of the company’s total revenue.
Furthermore, the company states that its above the line marketing costs are likely to increase by between 40% and 50% year on year in the 2005 financial year.
The business remains highly profitable, however, with profit after tax increasing by 12% year on year to £273 million. The company’s secondary products are also performing well, with Sky+ households increasing by 128,000 year on year to 770,000 – more than double the total at the same point last year.
Sky Multiroom also saw a rise in subscribers, adding 90,000 in the quarter to total 563,000, 108.5% up on the same quarter last year.
Commenting on the company’s results, James Murdoch, chief executive of BSkyB said: “Continued focus on the implementation of our strategy is returning strong subscriber growth, a good mix of customers, growth in Sky+ and Multiroom, and substantial profit and cashflow. The whole team at Sky put in a strong performance to deliver these results and we remain focused and energetic in pursuing our long-term growth plan.”
Earlier this year saw Sky announce massively increased subscriber figures, representing its strongest quarter since 2002 and prompting Murdoch to dismiss the threat posed by free to air terrestrial TV (see Sky Confident Subscriber Rise Can Quash Freeview).
Sky: 08702 40 40 40 www.sky.com