By Mark Baber
October 18 – Pay TV provider BSkyB said it is enjoying record demand for its TV and broadband services, despite the launch of BT’s new rival sports service. BSkyB, which is 39% owned by Rupert Murdoch’s 21st Century Fox, added 111,000 broadband customers and 37,000 TV customers in the quarter to the end of September.
Total viewing of Sky Sports channels is up 15% on the same quarter last year, which is explained by strong on-demand viewing, the popularity of the Sky Go mobile service and the switch in matches from Saturday lunchtime to Saturday evening. Audiences for the first 23 live Premier League games were up 20% on last year, as an average of 1.55 million fans watched each match, compared with 1.29 million last season.
The group 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% to £1.84 billion ($2.96 billion). Profit was down 8% £285 million – mainly a result of the hit it took on the £2.3 billion TV rights deal for Premier League matches for the next three years, a 40$ increase on the last deal. Overall, programming costs were up 6% at £622 million. The results were largely in line with analysts expectations.
BSkyB now has more than 5 million broadband subscribers, compared to 6.8 million for BT and TV customers have now hit the 10.5 million mark.
Average revenue per user (ARPU), a key measure of the whether the product is right, continued to grow, increasing by £17 to reach £599, a 3% growth over the previous year. The largest driver of higher ARPU was the greater average number of products taken by customers.
Auditor JP Morgan said in a note, “With all the negative sentiment around potential BT Sport competition and its potential impact on BSkyB broadband net adds, we think the market will be comforted today by the better-than-expected broadband growth.”
In fact, shares hit a 3-month high of 949.50 in Friday’s trading, before falling back to 929.50 at 11.05 am.
JP Morgan were cautious about the latest figures, saying “Given that BT and other key UK broadband players are yet to report, the market will need to wait to put Sky’s broadband adds for the quarter into context. While today’s results are better than expected, it is only the first quarter and therefore we think too early to see any notable change in consensus estimates.”
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