UK satellite broadcaster BSkyB is creeping closer to its end of year target of 8 million subscribers and there are now over a million homes with a Sky+ digital video recorder, but chairman Rupert Murdoch says the convergence of communications will enable the company to continue to re-invent itself.
The number of new subscribers added in the last quarter is the lowest since Sky became an exclusively digital broadcaster. The rate of customer churn also rose, reaching 11.7%, well above the aim of limiting this to 10%. Nevertheless, Sky expects to reach its target of 8 million subscribers by Christmas.
The total number of satellite subscribers grew by just 57,000 in the last quarter to 7,844,000. Of these, Sky+ households increased by 139,000 to 1,027,000, up from 474,000 the same time the previous year, representing 13% of Sky subscribers. Multiroom subscriptions also increased by 103,000 to 748,000, up from 357,000 the previous year, now making up 10% of the subscriber base.
Announcing results for the last quarter, BSkyB revealed revenues up by 8% to over a billion pounds. This was not enough to please investors, with shares falling on the news.
At its annual general meeting, BSkyB survived a shareholder vote on plans to allow News Corporation to raise its stake in the company. The proposal was approved by 54% of the shareholders.
Chairman Rupert Murdoch said that consumer demand for pay-television is growing. He re-iterated the view that it will grow to 80% of the UK market, reaching another 10 million households.
“In addition to being a successful player in a growing market, we also see opportunities to offer a wider range of communications services as part of increasingly ‘whole-home’ solutions for customers,” observed the chairman.
“Real change is upon us, not only in the genuine ways that entertainment and communications services are coming together, but also in how the internet has brought about changes in consumers’ lives.”
He described the proposed acquisition of Easnet as “an important step in ensuring that we continue to deliver the services that our customers want in the future. It will give us the tools to reinvent our business yet again and to stay at the forefront of innovation in a competitive marketplace.”
His son, James Murdoch, the chief executive of BSkyB, said “Sky increased sales to new customers and achieved strong profit growth this quarter despite facing a challenging competitive environment and continued economic pressures on consumers.”
He described passing one million Sky+ households as “an important milestone” and said that a range of initiatives, including the proposed acquisition of Easynet “will ensure that Sky continues to set the pace in a highly dynamic marketplace”.
Sky by broadband and Sky by mobile applications are scheduled to launch later this year as a bonus service to qualifying satellite subscribers.
SkyBet revenues increased by 8% to £64 million for the quarter, while costs increased to £59 million.Sky Active revenues were steady at £22 million.