HD boosts Sky profitability

HD penetration of 30%, net customer additions of 429,000 customer additions and a multi-year output deal with HBO were the highlights of a strong 12 months for BSkyB.

The satcaster added 90,000 new subscribers in the quarter to June 30, 2010, taking its subscriber base to 9.860 million. Gross additions were 348,000, putting churn up to 10.5%, up from 9.9% on the same quarter in 2009, though at 10.3% the figure across the year remained flat. ARPU reached a new high of £508 (€609), an increase of 9% on 2009.

Revenues of £5,912 million were up 11% on 2009, delivering increased operating profits of £855 million, and adjusted EBITDA of £1,192 million.

“It has been a good year for Sky but we stay focused on the challenge ahead. The economic outlook remains uncertain and, against that backdrop, we’ll pursue the consistent set of priorities that have served us well so far,” said BSkyB chief executive Jeremy Darroch.

A new multi-year deal with HBO will make Sky the home of first run content from the US premium channel. Although HBO has branded areas on Virgin Media and Apple iTunes, it has no UK channel, and the announcement effectively rules out such a launch.

All new HBO-commission programmes and series will now be broadcast exclusively on the Sky channels. The first HBO production to be seen under the agreement will be Boardwalk Empire, the much-anticipated Prohibition-era drama from Martin Scorsese and ‘The Sopranos’ Emmy-award winning writer Terence Winter. Sky will also offer access to HBO programmes through its on-demand platforms, including the soon-to-launch Sky Anytime+ service, which will turn Sky+ boxes into hybrid receivers. Sky will have access to HBO’s back catalogue that includes The Sopranos and Six Feet Under and the first right of refusal on any UK co-productions.

429,000 net HD customers in the quarter, bringing 12-month cumulative growth to 1.6 million. Sky said the percentage of customers choosing HD had tripled following its decision to make Sky+ HD the standard receiver, free for new customers, and priced in the region of £49 for upgraders. The satcaster has also benefitted from the launch of HD channels from other broadcasters.