Sky Italia begins to slide

After three stable quarters with no net increase in numbers, Sky Italia has reported a net drop in subscribers of 63,000, its first fall since News Corp took control of the operation from Stream and Telepiu in July 2003.

The News Corp-owned satcaster had added 150,000 in the quarter to December 31, 2009, before churn took its toll. Subscriber levels now stand at 4,750,000. The company reported a second quarter loss of $30 million, a decrease of $40m on the same period one year ago.

“Sky Italia is faced with tough, with tough economic environment and increased competition. But we’re certainly enthusiastic about the potential of this business given the high quality of our service and the low penetration of page elevation in Italy,” said News Corp chairman and CEO Rupert Murdoch.

ARPU reduced by €2 to around €43, due to a lower average tier mix and reduced pay-per-view revenues. However, at the end of the quarter 2.1 million subscribers were taking at least one premium service, such as HD or Multiroom, 500,000 more than the 1.6 million quoted by News Corp at the end of the last quarter.

Murdoch gave a vote of confidence to new Sky Deutschland CEO Brian Sullivan, he said that with the management team that had helped turn BSkyB into a powerhouse, News Corp would be able to make headway in another big market.