BSkyB has announced the addition of 100,000 new subscribers in the final three months of 2011, amid some concern of a slowdown in the number of new subscribers.
The per customer cost to acquire a TV subscriber increased £14 (€16.7) to £368, though Sky chief executive Jeremy Darroch said Sky had been no more aggressive on promotion than in previous quarters.
The satcaster recorded its highest ever first-half adjusted operating profit, up 16% at £601 million. BSkyB announced a 5% increase in dividend in addition to the £750 million buy-back initiated on November 29, 2011.
“Our approach to growth is working well. We’re adding more value to the Sky subscription by investing where it matters most to customers, with more great entertainment and ground-breaking innovation like Sky Go. Alongside that, we’re improving efficiency behind the scenes so we can expand margins at the same time,” said Sky chief executive Jeremy Darroch. “Financially, we’ve delivered another strong result, with our highest ever first-half operating profit and 20% growth in earnings per share”.
A total of 10.471 million customers in the UK and Ireland now take Sky services, more than three million customers taking all three of TV, broadband and telephony, up by 26% year on year. In the tough economic environment, churn has held steady at 9.6%.
Costs have been reduced as a result of a move to an entirely insourced box, 60% of customers now have the Sky+ HD receiver, up from 20% two years ago, and being the single largest factor in reducing service visits by some 33%. CFO Andrew Griffith attributed this Despite this there are no immediate plans to switch off standard definition channels.
BSkyB made £34 million from the sale of set-tops to Sky Italia.
1,300 new Sky jobs are being created across the UK and Ireland over the next two years, including the opening of a new service centre in Dublin.
One potential area of concern is that of the pubs and clubs market in the retail trade, where Darroch admitted Sky was facing more challenges than it had in the past. “If you’re a high quality chain then I think you are in pretty good shape, but if you are a single-handed publican you are under a bit of pressure and certainly the more tertiary locations that are off the high street are struggling a bit more.”
Darroch said Sky had recently reduced prices in pubs that had a larger food element and expressed a hope that the issues around foreign satellite reception would soon be resolved.
The Numbers
10,253 million TV Subscribers
4,063m HD Homes
2,350m Multiroom Subscribers
3.47m Telephony Subscribers
Churn 9.6%
Total Subs 10.471 million
+ 100,000
Source: BSkyB, Q4 2011.
