Glory days at BSkyB

chris

High definition broadcasts and rising subscriber numbers have proved to be a double cash-cow for pay-TV broadcaster BSkyB, which revealed its Q1 results on Oct 23.

“Strong consumer demand” for pay-television, internet and phone services helped Sky deliver better-than-expected first-quarter results despite the UK and Irish economic downturn, with no signs of demand abating, said Sky’s CEO Jeremy Darroch. Net-growth in new subs was three times higher than a year ago. Indeed, the overall results are sparkling, especially given that Sky’s main rival, Virgin Media, has seen only marginal benefits from pay-TV.

Darroch said the group has made a good start to the new financial year, with strong demand for its Sky+HD set top boxes, which offer high definition television. "As the year continues, we'll maintain a clear focus on our customers and on delivering on our priorities, all with the aim of building a larger, more profitable, and better business." Sky finished the quarter-year with 9.56m subs, the largest number in Europe.

Operating profit before exceptional items, the key figure tracked by UK analysts, rose 9% to £198m (£182m for same period last year) for the three months ended Sept. 30. Revenue jumped 10% to £1.38bn (£1.25bn), well ahead of most expectations and helped by 94,000 net new subscriber sign-ups. High-definition clients rose 287,000 to 1.6m, and this current pre-Christmas quarter is likely to see similar growth (at least) taking Sky to almost 2m subs by the end of the calendar year.

“High definition has continued to perform very well and more customers are saving money by choosing Sky for each of TV, broadband and telephony,” said Darroch. “We absorbed the short-term costs of customer demand and delivered double-digit revenue growth.”

BSkyB gained 100,000 broadband customers in the quarter taking its total to 2.3m. All-important ARPU (average revenue per user) rose to an impressive £469 pa, from £430 a year earlier.

And Sky’s aggressive growth is set to continue. New on-line broadband services (to Fetch TV, and onto Microsoft’s X-Box consoles) will likely boost numbers still further.

Given the tough economic environment, more Britons are staying home for their entertainment, fueling demand for BSkyB's services. “We have won more clients despite the tough economic environment and I’m confident that we will continue to grow,” CFO Andrew Griffith told Bloomberg TV. He reiterated Sky’s target is to reach 10m customers in 2010.

However, the only downside problem was churn, higher at 11.3% which Darroch blamed on “important operational decisions”, including price rises and a tougher line on slow payers.


Source:RapidTVNews