Stay at homes will boost Sky subs

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BSkyB’s Q3 results are due on Wednesday, Jan 28, and the market’s expectations are all positive for current sales and revenues. However, there’s a sense of uncertainty over Sky’s all-important future soccer coverage, along with other concerns.

First, the numbers. Numis Securities in a note, suggests that Sky’s overall subscribers will have expanded some 145,000 in the pre-Christmas quarter to Dec 31. Sales of HDTV and Sky+ units are also forecast to be buoyant. There are also likely to be an additional 180,000 Sky Broadband subs taking that particular number to just shy of 2m (1.98m) subs.

Paul Richards at Numis Securities, in his note, added a word of caution, saying: "Compared with all other media in the rest of the UK we expect BSkyB to hold up very, very well. But it is not something that is going to be immune from the UK falling into recession."

However, the major worry is directed at Sky coverage of the English premiership soccer games. Three anxieties are in the air: First, what difference might a strong third party make to final bill. Few doubt that Sky will pay whatever it costs to at least maintain its current portfolio of matches. But a newcomer, like Disney/ESPN – on its own or linked with arch-rival Setanta – is bound to force acquisition costs up.

Worry Number 2 is what Ofcom might do in its examination of the pay-TV market. One option is that Sky will be forced to make its premium channels available to the wholesale market potentially at Ofcom-regulated prices which is bound to be bad news for the broadcaster.

The third worry, which CEO Jeremy Darroch is bound to address on Wednesday morning, is the economic downturn badly affecting the UK. Most observers suggest Sky will not be too bothered in terms of its overall numbers, but there is anxiety that as the credit crunch bites then viewers will trade down, shifting away from premium bundles into less expensive viewing options. The linked anxiety is what this will do to Sky’s self-imposed 10m subscriber target to be reached by 2010.

Analysts at Charles Stanley agree that the 145,000 extra subs would mean a slowdown in the growth of new subscribers, although they point out that this will take the total to some 9.2m, describing that total as a "resilient" performance in current markets.


Source:RapidTVNews