BSkyB said today that its first-half profits soared 26%, as credit-crunched punters decided to stay at home and improve their TV options. As well as gaining 171,000 new customers in the three months to December – above even the most optimistic analyst forecasts – it’s also squeezing more revenue out of its existing customers. A total of 188,000 people (including current and new subscribers) signed up to its premium HD service, which seems to be the big focus at the moment. Last year, some analysts were arguing that pay-TV was under threat from the growth of Freeview and the constraints on consumer spending – but on this evidence, its demise seems to have been greatly exaggerated…
It was an impressive set of numbers from BSkyB today: revenues for the six months to the end of December were up 6% to £2.6bn, a bigger jump than the City was expecting, while operating profits soared 26% to £388m. During the last quarter of 2008, it signed up another 171,000 Sky converts, which is more than in the same period last year. Clearly TV is the new going-out – emphasised by the statistic that the average TV viewing per person increased last year to a (frankly shocking) 3.7 hours a day. What’s more, Sky also managed to boost its broadband subscribers to 1.95m, and its phone subscribers to 1.5m, meaning that it’s hit its 2010 target two years early.
Sky’s high-definition service also seems to be going great guns (despite the fact that it costs an extra £10 a month on top of the standard package, and you don’t really get any extra channels). At the end of last year, it had 779,000 HD customers, so an extra 188,000 subscribers represents a pretty big jump. However, just 8% of its total subscriber base is currently signed up for the service, while there are apparently 7m households with HD-ready TVs (a number that Sky expects to double by 2011). So there’s plenty of room for improvement – and judging by the number of Sky+ HD stands we’re seeing in shopping centres at the moment, BSkyB is clearly trying to do just that *it’s also slashing the price of an HD box from £150 to £50).
The good news, as far as the general economy is concerned, is that the rise of HD is going to create UK jobs – about 1,000 in total, says Sky, including 600 engineers and 400 call-centre staff (many of whom will be based in a new site in Leeds). At a time when so many companies are announcing large-scale lay-offs, it’s nice to get some good employment news for once. And according to Sky, we’ll be even more cheerful if we spend £10 extra a month for the privilege of watching sweat ooze from every pore of our favourite sports stars...
In today's bulletin:
BSkyB gets 171,000 extra customers for Christmas
Philip Yea quits as 3i portfolio loses £864m
Asda provides ray of cheer with 7,000 new jobs
Car industry no lame duck, insists Lord Mandelson
Rich cool their jets at Davos