Sky claims it has established the biggest connected television platform in Britain and Ireland. Over a million Sky homes connected their Sky satellite set-top boxes to broadband in the last quarter, taking its connected base to 4.4 million homes, or over 85% of Sky+HD boxes. Meanwhile BT is still only approaching a million television customers, despite its investment in sports coverage.
Sky edged past 10.5 million television homes, adding 77,000 television subscribers in the last quarter of 2013. Over 5 million of those homes now have Sky+HD, an increase of 112,000. 4.35 million of those satellite boxes are now also connected to broadband, more than double the number a year previously.
Sky sees an average of 10.9 million downloads a week, which is still modest in television terms. For comparison, the BBC iPlayer delivers around 50 million requests a week for television programmes across all supported platforms.
There are now 3.3 million unique users of the Sky Go service, which allows viewing of scheduled and on-demand programmes on computers and mobile devices. Sky Go received 200 million requests over the quarter. Sky Go Extra, which also allows media downloads and up to four registered devices, has 643,000 subscribers, with over a quarter of a million signing up in the last three months of 2013. It costs an extra £5 a month, although there is currently a free two-month trial period and it comes bundled for multiroom customers, of which Sky has over 2.5 million.
Jeremy Darroch, the chief executive of Sky, said on demand usage more than trebled over the year and the number of movie rentals through the Sky Store doubled.
“More customers than ever are choosing Sky Go to watch content both in and out of the home, helped by the addition of 14 new entertainment channels and the launch of Sky Go on more connected devices,” he said.
Sky said its connected television services were increasing customer satisfaction and advocacy, while driving subscriptions to higher-tier packages.
Sky said the growth of NOW TV was “supported by a positive response to our new low-cost NOW TV box”, although it does not break out any figures for the service, including them in its total television subscriber numbers. The broadband box, based on a Roku device, is available for just £9.99, with entertainment, movies or sport programming available on a monthly or daily basis, with special offer bundles.
Sky has announced a partnership with the commercial broadcaster ITV, making much of its programming available across its connected services, including Sky Go, NOW TV and Sky Store. ITV will also launch a new drama channel, ITV Encore, initially exclusively available on Sky.
With more customers subscribing to more products, and over a third taking television, broadband and telephony, the average revenue per subscriber is £47.50 per month.
Sky reported revenues of £3.7 billion for the half year, with a pre-tax profit of £527 million.
If Sky is suffering from the entry of BT into the sports television arena it is not showing it.
BT reported that it has 2.5 million retail customers to BT Sport, although many of them will be watching on Sky, with up to another 2 million available through Virgin Media.
Gavin Patterson, the Chief Executive of BT, said: “We had some good matches over the festive period and some of these attracted over 1.5 million viewers, even before online and app viewers.”
BT added 53,000 television customers in the last quarter, ending the year with 956,000, around 100,000 of them now taking IPTV channels from BT.
BT spends a lot of time talking with analysts about football, which is really a distraction from the bigger picture. The key question is how far increasing revenue from broadband offsets the loss of revenue from telephone calls.
The competition with Sky is really about broadband rather than sport. BT is attempting to support its broadband with television and sport, but Sky seems to be doing a better job of adding broadband to its more extensive television offering.
In the last year, BT lost a quarter of a million telephone lines but added half a million broadband customers.
In the same period Sky added 890,000 broadband customers, reaching a total of over 5.1 million. It also added 770,000 telephone customers, reaching a total of 4.8 million.
BT ended 2103 with 7.1 million broadband customers, adding 150,000 over the quarter, compared to 122,000 in the same quarter a year previously, or 146,000 in the quarter the year before that. So it is not clear how much difference BT Sport is really making.
BT reported revenues of £4.5 billion in the quarter, of which £1.8 billion came from retail services, with £633 million of that from telephone calls and lines and £350 million from broadband and television.
Given that it spent £140 million on BT sport in that three months, it works out at an investment of over £900 per additional broadband customer, or over £90 a head for each of those 1.5 million football viewers.