BSkyB profits up 40% as HD take-up increases

LONDON - BSkyB's third quarter pre-tax profits have risen 40% year on year to £180m, with the satellite broadcaster adding 94,000 subscribers and reaching 1.6 million Sky+HD households.

Although the pay-TV, telephony and broadband company's churn rate rose from 10.9% to 11.3%, the net subscriber additions took its total customer base to 9.54 million households.

Throughout the recession, Sky has been closing in on its target of 10 million customers by the end of 2010, and the latest figure confounds .

Sky showed a 22% increase in take-up of Sky+HD, with 287,000 households signing up during the quarter, while 411,000 signed up for (including those signing up for Sky+HD). The number of customers with Sky+ is now more than 60% of the total customer base at 5.9 million.

Jeremy Darroch, chief executive of BSkyB, said: "High definition has continued to perform very well and more customers are saving money by choosing Sky for each of TV, broadband and telephony."

The percentage of customers taking all three services rose from 12% to 17%.

As a result Sky's average revenue per user (Arpu, a key measure for the company) rose from £430 to £469, equating to double-digit revenue growth of 10% to £1.38bn.

Advertising revenue, at £65m, came in 4% lower than last year but Sky pointed to an estimated 13% decline in the overall TV advertising market.

The stockmarket reacted positively to the results, with Sky's share price rising 3% to 576p as of 8.45am.

The strong results set the bar for rival Virgin Media, which is due to report its third quarter figures next Thursday.

Virgin Media's second quarter revenues were £936m, down slightly year on year, and it ended the quarter with 3.67 million digital TV subscribers.

Richard Branson, who licenses the Virgin brand to the company, , emphasising his support of Ofcom's proposals to make Sky sell its premium channels to rivals at a set price.

In his piece Branson put the "relentless growth" of Sky's satellite platform down to its strategy of selling its premium content to other pay-TV operators "selectively and at very high prices".

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