The company said first-half advertising revenues fell £16m to £118m, although BSkyB said figures were distorted by unusually high activity from telecoms and IT companies last year.
BSkyB said that compared with figures for 2000, its ad revenues increased 4%, while the market fell 10%.
Speaking at the company's interim results presentation, chief executive Tony Ball said that multichannel TV was drawing a very attractive audience for advertisers.
Ball said that multichannel accounts for 41% of the TV audience, with 50% of ABC1 viewers watching multichannel and 56% of ABC1 viewers between the age of 16-34 also tuning in.
The company's channels are also increasing their market share. Sky One draws 4.8% of 16- to 34-year-olds while Sky News is the most watched 24-hour multichannel news service with 1.16% of the audience, beating BBC News 24 with 0.75% and ITN with 0.16%.
Ball dismissed BSkyB's rival broadcasters saying that he "doesn't need a quango or a digital Tsar to run this business".
He was also bullish about his company's chances of success in the competition row with the Office of Fair Trading brought on by complaints by ITV Digital and more recently Telewest. The two are arguing that Sky was overcharging them for carriage of its channels.
Ball said his company would "go the whole way" in its fight against the accusations of anti-competitive behaviour. BSkyB has until March to reply to the OFT's investigations. OFT will then respond in the summer.
"We are convinced we have played by the OFT's rules and stuck to their rate card. We will go all the way, to the courts right through to appeal if necessary," Ball said.
He added that the company had not even taken in to account the potential financial impact of the competition case. "This enquiry goes back two years. It's not worth modelling," he said.
Meanwhile, Ball said the company could move into pre-tax profit as early as the end of 2003, despite writing down a £1bn stake in German broadcaster Kirch.
The company has implemented tough cost-cutting measures, including slashing its above-the-line spend by 40% and turning more toward direct marketing. He added that 10% of subscription sales were online sales.
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