BSkyB continues to dominate the digital TV market, despite showing massive pre-tax losses.
The company, which today published its end of year results, added 1.7m digital subscribers to its customer total over the year, bringing the overall number of subscribers to 5.3m.
Chief Executive of BSkyB, Tony Ball, was confident that the group would reach its target of 7m digital viewers by the end of 2003. He said: “We continue to add record numbers of subscribers and increase the average revenue per subscriber. We therefore remain on track to meet both our subscriber and ARPU targets. Our focus will remain on profitability driven by strong revenue growth and we look forward to delivering positive cash flow from the end of this calendar year onwards.”
Revenues across the group increased 25% to £2.31bn across the year. Advertising revenues grew by 12% and the average revenue per user (ARPU) rose to £313, with £11 coming from interactive services.
However, pre-tax losses were significant at £514m, compared with £262m the year before.Heavy costs were incurred by Sky’s investment in the Kirch Pay-TV joint venture in Germany and the decision to subsidise the give-away of free set top decoders was successful in attracting large numbers of viewers, but proved costly and unpopular with shareholders.
The company has made a concerted effort to cut costs recently, closing Sky pictures and cutting 300 jobs at its interactive shopping channel, Open. A £30m a deal with Ladbrokes, to provide online betting services, and a new set top box, costing £300, are expected to generate extra revenue.
Analysts at ABN Amro described the results as ‘excellent’ and said that encouraging progress is being made on all fronts.
Subscribers to MediaTel Insight can access more national and international media analysis, forecasts and news. For subscription details please visit the site.
