Sky growth in tough consumer market

Sky Digital drew ever closer to nine million subscribers at the end of June as the pay-TV operator admitted the challenging nature of the current consumer market.

Chief executive Jeremy Darroch said despite the credit crunch customers were choosing a broader range of products and staying with the company for longer. “While there is much uncertainty around the consumer environment, there remains good headroom for profitable growth in our core sectors. We are well equipped to meet customers’ demands for quality, choice and value; and we have a strong financial model to deliver growth and returns.”

New customer additions for the quarter ending June 30, 2008 of 310,000 resulted in net growth of 92,000 taking the total subscriber base to 8.980 million. Churn reduced to 9.8% and ARPU increased to £427.

The Sky+ personal video recorder added a further 321,000 net homes to reach 3,714,000. Sky HD added 33,000 on the quarter, climbing to 498,000. The renamed Sky+ HD product is being supported by the recent reduction in the cost of the Sky+ receiver from £249 to £150. Sky was never likely to reap any benefits from Euro  2008, the competition was shared between BBC and ITV, the latter choosing to keep its HD coverage exclusive to Freesat.

Broadband enjoyed net growth of 200,000 to 1.628 million and the Sky Talk telephony service added 146,000 to reach 1,241,000.

Operating profit of £724 million included £162 million investment in broadband and telephony, and a further £22 million in Easynet. Exceptional charges of £28 million were also included.