BSkyB subscribers up again - but no word on News Corp

The company has beaten expectations and is on track to have 10m customers by Christmas. Which will come as good news to Rupert Murdoch.

by Emma Haslett
Last Updated: 22 Oct 2010
Satellite broadcaster BSkyB shows no signs of slowing down: in its latest quarterly results, the company said that it added 96,000 new customers in the three months to the end of September, smashing analyst expectations  (by just under 30,000). In fact, it's now well on track to hit the 10m mark by Christmas. Revenues are up, too, to £1.53bn – a rise of 15% from a year ago, which the company says is mostly down to cross-selling new services. Either way, it’s going to strengthen the hand of the BSkyB board, who are currently engaged in tricky negotiations with Rupert Murdoch over exactly how much its shares are worth....

Despite the record number of new subscribers, BSkyB says a large part of that profit came from existing users upgrading their subscriptions. The company has widened its product base to include on-demand TV, a 3D TV channel, and live Masters golf – and it seems customers are keen. That’s nicely reflected in the amount of revenue it is managing to squeeze out of each subscriber per year – £514 per head, up from £469 a year ago. The number of subscribers who are going for the hat-trick – broadband, telephone line and television – has jumped to 2.3m, which is 39% higher than the same time a year ago. Not bad.

But while subscriptions may be up, the growth in the number of HDTV users is actually slower than a year ago, with just 215,000 new subscribers to the service – an indication that the company may be close to hitting market saturation point, perhaps? Or a good incentive to keep customers hanging by making its roll-out of 3D TV nice and slow…

No word on the News Corp buyout, though. Murdoch's company wants to buy the 61% of BSkyB it doesn’t own yet – and BSkyB seems reasonably interested. It has reportedly already spent a cool £2m (in less than four months) on advisory fees relating to the bid, although directors are apparently still at loggerheads with Murdoch over the value of its stock. News Corp has made an offer of 700p per share – which is at least £1 less than the figure BSkyB’s directors supposedly have in mind. If News Corp gives in, it would add an extra £1bn to the value of the company – not a sum to be sniffed at. And we can’t imagine today’s results will do much to harm BSkyB’s case.

Other than that, the only obstacle between Rupert Murdoch and total media world domination is those pesky rivals. Earlier this month, a group which included Channel 4, the BBC, the Telegraph and the Mail, wrote to Vince Cable urging him to block the deal. Although given that News Corp already owns 39% of the company, and Murdoch’s son James is BSkyB’s chairman, will it really make that much difference anyway?

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