Sky to up subscription prices in attempt to meet targets

LONDON - Sky is to raise subscription prices for the second time this year, with new charges due to come in this September as it looks to hit new customer revenue targets.

The broadcaster is increasing the rates with an eye to hitting an average revenue per user of £400 annually by the end of next year. It will be the second time this year that some of its subscribers will have faced an increase in rates.

Premium-package subscribers face a £1 increase from £40 to £41, but people who have less expensive packages will pay an extra 50p a month. According to reports, the hike will mean an extra £50m in revenue each year for Sky.

The price rise plans follow the news earlier this month that BSkyB is launch a free-to-air digital satellite service, providing up to 200 channels, to counter the threat from the Freeview service.

The move is part of a plan to further cement Sky's increasing presence in the UK television market. The move also marks an end to Sky's policy of only offering a premium pay-TV service and will further increase its revenues, which already see it outstrip rival ITV.

The service, dubbed "free sat", will be available for a one-off charge of £150 for a connection package.

The hope is that these new "free sat" customers can be converted to pay-TV packages and ultimately increase Sky's average revenue per customer targets.

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