Sky boosts warchest as Virgin hostilities escalate

BSkyB is bolstering its armoury as it wages war on Virgin Media for pay-TV subscribers by adding £13m to its promotional spend this year.

The increase comes as the broadcaster battles a fall in subscriber growth and rise in churn rates, which it is set to reveal in its third-quarter results this week.

According to an analysts report from Morgan Stanley, Sky's total spend on marketing, which includes staff costs as well as the price of subsidising its set-top boxes, has risen substantially year on year. Total marketing costs will rise by £90m in the first nine months this year to £564m, compared with £474m for the same period last year.

Sky has attributed its weak subscriber growth to its strategy of focusing on high-value customers, such as those who subscribe to its triple-play offering, rather than those consistently taking advantage of discounted offers.

Sky spent almost £29m on advertising in the first quarter of this year compared with £20m in the same period last year, according to Nielsen Media Research.

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