UK satellite broadcaster BSkyB has reported a rise in first quarter profits but there is further evidence that subscriber take-up is slowing down.

BSkyB added 62,000 digital satellite subscribers in the three months to the end of September, indicating a slowdown from 81,000 and 66,000 in the previous two quarters, in comparison to 170,000 new customers in the same quarter in the previous year. The numbers exceeded the average analyst estimate, which had predicted a rise of only 50,000.

The Sky+ personal video recorder service continued to grow in popularity, adding 77,000 new homes, with nearly a quarter of them being first time subscribers and the total number of users quadrupling in a year to 474,000.

The growth in Sky+ penetration also continues to contribute to the number of households taking two or more set-top boxes, rising by 64,000 over three months to 357,000, an increase of 94% over the last year.

With a total of 7,417,000 households receiving Sky through a satellite dish, 28% of all homes in the UK and Ireland, the company says it is still on target to reach eight million subscribers by the end of 2005.

The effect of a new marketing campaign will be seen in the figures for the next quarter, which will include the all-important pre-Christmas sales.

Total revenue increases by 11% to £940 million for the quarter. Commenting on the figures, chief executive James Murdoch said: “Sky achieved a solid set of results in the first quarter, with good sales and profit growth and we remain in a strong financial position.”

At the Annual General Meeting of the British Sky Broadcasting Group, the company said that only 43% of homes in the UK and Ireland currently take a pay television service and it believes that over time this can grow to around 80%, meaning another 10 million households will take pay television.

Sky has set itself ambitious new targets for 2010: to reach 10 million subscribers, to have 25% penetration of Sky+ and to have 30% penetration of multi-room subscriptions.

Interactive revenue
Total interactive revenues increased to £81m, up 8% on the same period in the previous year. These revenues have now been broken out into separate figures for SkyBet and SkyActive. Turnover on SkyBet increased by 18% on the comparable period to £59m, driven by the growth of interactive betting and gaming, online betting and casino revenues. SkyActive revenue was down 12% to £22m due to lower revenues from the SkyBuy retail service and the expiry of a number contracts and services.

Total interactive revenues continued to exceed those from advertising, which were also up from £64m to £72m.