Another good six months for Sky: revenues were up 10% to £2.9bn, thanks in no small part to almost half a million extra sign-ups for its HD service (a 30% increase during the period). With its total customer base inching ever closer to the 10m mark, the satellite broadcaster appears to be benefiting from our need to spend more time at home with our pay cheques. Now it hopes to take its offering to a new dimension (boom boom) with the launch of Europe’s first 3D TV channel, which we’ll soon be able to watch on 3D TVs. It’s introducing the technology this weekend, with various pubs showing the Arsenal-Man United match in 3D. Although we suspect Wayne Rooney probably looks a lot better in fewer dimensions, to be honest...
Sky achieved this 10% hike in revenues (which pushed operating profits above £400m) both by acquiring new customers, and squeezing more juice out of their current ones. 172,000 newbies joined during the period, taking the total to 9.7m, while customer churn (i.e. cancelled subs) was a lower-than-expected 9.6%. All its product ranges enjoyed solid growth, from Sky+ through to broadband and telephony, but it was HD that was the real ‘standout performance’, according to boss Jeremy Darroch: another 482,000 people signed up, taking the total just past the 2m mark.
Thanks to all these various extra services, Sky is now making almost £500 from each customer. And it looks as though there’s still plenty of room for improvement. Sky+HD has grown at over 150% in the last year, but nearly 80% of Sky’s customers still haven’t succumbed to it yet (that extra 30p a day still seems expensive to us, but then we are skinflint journalists). Equally, only 18% of customers take their broadband and telephony as well as their TV from Sky. So there’s probably still some juice left to squeeze.
And then there’s 3D, Sky’s next big thing. Its whizzy new technology will get its first ever UK public airing this weekend, with punters donning those silly glasses to watch the top-of-the-table football clash between Arsenal and Manchester United in 3D at nine pubs in Manchester, Cardiff, Edinburgh and (for the benefit of Man U fans) London. Sky 3D will be launched in April, initially for commercial customers only (i.e. pubs), but ‘later in the year’ it will be available to Sky+HD customers too. Given the remarkable success of Avatar in the cinema and the imminent arrival of 3D TVs, Sky clearly thinks 3D’s time is now.
Time will tell on that one. But one thing’s for sure: despite fears about a slowdown in our discretionary spending, Sky – aka Britain’s Most Admired Company, lest we forget – still seems to be going great guns. In every dimension.
In today's bulletin:
Adam Crozier quits Royal Mail to run ITV
BSkyB cashes in from HD - now for 3D
Ex-Wal-Mart exec to run Morrisons - while Waitrose really satisfies
Editor's blog: The iPad - a sanitary lesson in marketing
Our Man in Davos: Nervous about sovereign debt, and curious about Carla