Sky’s not having a bad week. Fresh from snatching the TV rights for another prestigious sporting event (The Open), today it announced its UK customer number were growing at the fastest rate in nine years as 204,000 new people signed up to its services in the second half of 2014.
Much of the success was down to the growth of its Now TV service, which offers rolling monthly contracts, rather than the expensive shackles of Sky’s main TV packages. There were concerns at launch that this could have cannibalised the company's existing customers but the move appears to have paid off.
‘The strength of our performance in the UK and Ireland shows that our approach to segmenting the market with the complementary Sky and NOW TV brands is working,’ said its chief executive Jeremy Darroch. ‘Across the board, customers are responding to our investment in more high-quality TV and innovative new services.’
Sky's stepped up its focus on 'original drama' in recent years, some say in a effort to become a British equivalent of America's highly regarded HBO - responsible for big hits like Game of Thrones, The Wire and Girls. Sky dramas like Mad Dogs, Fleming and The Tunnel haven't exactly been runaway hits but it's hoping that Fortitude, which is currently being broadcast, could help turn its fortunes around.
Including Sky’s recently acquired Italian and German divisions, group revenue in the six months to December was up 5% to £5,604m on a like-for-like constant currency basis, and operating profits were up 16%.
Another piece of good news for Darroch comes from Ofcom today. Virgin Media had asked the regulator to block the forthcoming hotly-contested Premier League TV rights battle between Sky and BT on the grounds that it could cause inflation to the detriment of customers. Ofcom is expected to throw out the demands today - although an investigation into the matter is ongoing so it could have a sting in the tail.
The auction itself will be a nail-biting time for Darroch. Sky’s dominance of Premier League coverage is the jewel in its crown, a jewel which BT’s Gavin Paterson seems to enjoy chipping away at, even if he doesn’t plan to steal it entirely. Losing more coverage to the former state monopoly would be a huge blow for Sky, which will soon be fighting BT in the mobile phone market as well as TV, broadband and home phones.