British satellite broadcaster Sky now reaches just under nine million subscribers. Over 40% of them now have a Sky+ digital video recorder. Sky still seems to be on track in its growth targets, despite the apparent threat of Freesat. Its investment in ITV has been costly, but arguably strategically successful.

Announcing results for the year to the end of June, British Sky Broadcasting Group Plc said it added 92,000 subscribers in the last quarter, to total of just below 8.98 million. Churn has been reduced to below 10%.

There are now 3.7 million Sky+ users and high-definition now reaches just under half a million homes. Sky says that there is significant headroom for growth. There is no sign so far that economic recession is affecting the market for Sky services.

“We have continued to grow strongly in a more difficult consumer environment. More customers are choosing Sky for a broader range of products and are staying with us for longer,” said Jeremy Darroch, the new chief executive of Sky.

Sky still seems to be just on track to reach ten million homes by the end of 2010, but for once it did not include this target in its results. When questioned, the Sky chief executive reiterated: “Our target is to get to 10 million customers by the end of the decade.”

There was also little acknowledgement of the impact that Freesat might have on its prospects, although it seems to have done little damage to date, unable to match the marketing muscle of Sky.

Sky revenues were up 9% to just under £5 billion from just over £4.5 billion the previous year. Operating profits were £752 million, slightly down on the previous year.

Overall, Sky made a loss of £127 million over the year, compared to a profit of nearly half a billion the previous year. This was partly down to the cost of its investment in commercial broadcaster ITV.

Sky has written down £616 million on its investment, a loss which has grown as the value of ITV shares has continued to fall. Sky is awaiting the outcome of an appeal on whether it will be required to dispose of the majority of its 17.9% shareholding at a considerable loss.

Nevertheless, it has prevented a possible scenario in which ITV and cable company Virgin Media could have offered increased competition to Sky. ITV is now staggering on the ropes as its shares continue to slide, while Virgin Media seems to have given up the fight on providing premium programming, concentrating instead on its video-on-demand and broadband offering. Time will tell whether it was a worthwhile investment.