Competition for BSkyB has hotted up in the past few months, with BT trying to muscle in on its (pretty hefty) share of the sports broadcast market. But that hasn’t prevented pre-tax profits at the broadcaster from rising 6% to £1.26bn in the year to the end of June.
Revenues in the period rose by 7% to £7.2bn, while operating profits increased by 9% to £1.33bn. The company said it had signed up 547,000 new customers over the period, pushing its total up to 11.2m.
Sky’s major challenges at the moment are twofold: firstly, to increase the number of internet-connected customers (who will then pay extra for additional TV shows and other services – a bit like in-app purchases). Secondly, to defend its share of the pay-TV sports channel market.
On the first count, it looks like it’s doing pretty well: the number of customers using internet-connected Sky+ HD boxes has increased by 170% to 2.7 million, with a 19% increase in users of its Sky Go service (which allows you to watch shows from your desktop, mobile phone, tablet etc) to 3.3 million. There’s also been a 200% increase in its Netflix-style Sky Store video rentals service.
On the sports front, things aren’t looking quite as rosy. Admittedly, it has secured a number of ‘key rights’ agreements over the past year, including live rights for all Home Nations and Republic of Ireland qualification matches for UEFA Euro 2016 and the 2018 World Cup, as well as a three-year broadcasting agreement with the Football League.
But yesterday, BT said it had signed up more than 500,000 subscribers to its new BT Sport channels. Although that’s a fraction of Sky’s current customer base, it’s just under the number of new subscribers the broadcaster achieved this year. Plus, it has exclusive rights to 12 out of the 38 premier league matches, including the first game of the season - so that's a draw.
Richard Hunter, head of equities at Hargreaves Lansdown, reckons BT has drawn the battle lines.
‘The spectre of BT’s current strength is looming large and despite the fact that Sky has clearly come out fighting, investors are currently favouring BT in what is becoming an increasingly compact space,’ he said.
Let the battle of the sports broadcasters begin…
- Read our interview with Team Sky's Fran Millar