BSkyB Revenue Increases, Profit Dips

October 17, 2013 World Screen Top Stories
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LONDON: BSkyB has reported a decrease in its first-quarter profit, mainly due to costs from its Premier League battle with rival BT, though revenue for the period was up 7 percent.

Revenue for the group increased 7 percent to £1.84 billion ($2.96 billion). Profit was down 8 percent £285 million ($459 million), which took a hit by the £2.3 billion ($3.7 billion) deal it was forced to make to prevent BT from securing the majority of Premier League matches for the next three years—this was a 40-percent increase on the last deal. Overall, programming costs were up 6 percent at £622 million ($1.07 billion).

BSkyB saw churn rise slightly in the period, by 0.1 percent to 11 percent.

There were 800,000 new paid-for subscription products for the three-month period, with quarterly growth up 50 percent year on year. BSkyB added 37,000 net new TV products and 107,000 new customers to HD. Sky Go Extra saw 219,000 new customers in the quarter, bringing its total base up to 385,000.

ARPU continued to grow, increasing by £17 ($27) to reach £559 ($900), representing growth of 3 percent versus the previous year. The largest driver of higher ARPU was the greater average number of products taken by customers.

Jeremy Darroch, BSkyB's chief executive, commented: “We have made a very good start to the year. Strong growth across the board drove a 7-percent increase in revenues and we added 50-percent more new subscription products than last year as customers continued to respond to the quality and value we offer. Adjusted operating profit was in line with our expectations as we invest in new services and absorb higher Premier League costs.

“We were particularly pleased with the continued strong performance in home communications. Quarterly growth in broadband was up on last year taking us past the 5-million customer milestone. In all, 36 percent of customers now choose to take all three of TV, broadband and telephony from Sky, over half a million more than last year.

“On screen, we enjoyed a fantastic summer of sport with the excitement of the Ashes and the Lions tour followed by our best ever start to the football season. Total viewing to our Sky Sports channels is up almost 15 percent on last year, including growth of over 40 percent in viewing through our mobile TV service Sky Go.

“We are making excellent progress against the plan we set out in July to accelerate growth and returns from new services. The number of connected Sky+HD boxes grew by almost 50,000 a week, faster than in any previous quarter, and we are seeing an immediate increase in usage as customers get connected. Weekly downloads through our On Demand service grew fourfold in the quarter while the number of movie rentals through Sky Store doubled on last year.

“While the consumer environment remains challenging, we are well placed as we execute a strong set of plans for the rest of the year.”