There are now more than 2 million homes in the United Kingdom with a Sky+ digital video recorder and nearly a quarter of a million of them have high-definition boxes. Over half a million homes are now taking Sky Broadband, but there are signs that the growth in satellite television subscriptions is slowing.
There are now just under 8.5 million satellite subscribers in the the United Kingdom and Ireland. Although over a third of a million new customers signed up in the first quarter of 2007, the there were only just over 50,000 net additions, suggesting that it is more difficult to retain customers in an increasingly competitive environment.
Sky HD is proving popular, gaining 244,000 subscribers in ten months from launch, making it their fastest selling additional television product.
In the last quarter, Sky faced renewed competition from cable in the form of a concerted commercial campaign from Virgin Media, although it remains to be seen how many customers may have defected to cable.
From next year, Sky could also face competition from the Freesat service that the BBC and ITV propose to launch as a companion to Freeview digital terrestrial television.
Nonetheless, BSkyB reported revenues for the last nine months up 10% on the previous year, with an operating profit of £613 million.
While churn may have risen to its highest level at 13.7%, the annual revenue per user is up to over £400, as the company concentrates on customer profitability and marketing new services, such as its “See, Speak, Surf” combined television, telephony and broadband offering.
“Changes to our retention and acquisition strategy are delivering valuable benefits to the quality and profitability of our business,” reported chief executive James Murdoch. “We are delivering on our multi-product strategy and customers are responding in record numbers.”
Sky has shown strong growth in its broadband business, following the acquisition of Easynet. The service is now available in nearly a thousand exchanges to over 60% of households in the United Kingdom, expected to reach 70% coverage in the next quarter, six months ahead of schedule. The company is on track to have more than 700,000 broadband customers by the middle of the year.