BSkyB added 192,000 new subscribers in the run-up to Christmas, ahead of most industry expectations.

The figures released by the UK satellite television operator suggest that the new advertising initiative introduced in October 2004 may be working, as Sky increased its subscriber base to over 7.6 million.

Analysts had been expecting a rise of between 150,000 and 180,000 new customers. However, although Sky’s numbers pleased investors, figures from the regulator Ofcom show that in the last three months of 2004 the number of people buying Freeview boxes outstripped those signing up for satellite by almost five to one.

In the six months to the end of 2004, Sky revenue was up 10% on the same period in the previous year to £1.9 billion, driven by a 6% increase in the number of subscribers. Operating profit was up 25% to £354 million and profit after tax up 18% to £154 million.

Sky maintains that it remains on track to achieve its target of eight million subscribers by the end of 2005.

The total number of Sky+ households increased by 168,000 in the quarter to 642,000, or over 8% of satellite subscribers. Significantly, over a quarter of new subscribers signed up to the personal video recorder service.

The number of multiroom subscribers also rose by 116,000 to 473,000, which is over 6% of customers.

Subscriber churn was down slightly to 9.5% over the year, with average revenue per user or ARPU up to £386.

Betting revenue was up to £118 million, reflecting strong growth in betting and gaming through interactive TV, although much of this money returns to the punter, with a gross margin of 10%.

Income for Sky Active was down as a result of lower revenues from the SkyBuy retail service, but other interactive revenues rose by 11% to £42 million, reflecting growth in areas such as interactive advertising, games and third party betting and gaming.

Taken together, interactive income once again exceeded that from advertising revenue on Sky Channels, which contributed £159 million and was up 8%, outperforming overall recovery of the UK television advertising sector.