Sky’s first financial report since the consolidation of the German and Italian businesses delivered falling churn across the board as customers increasingly enjoy on demand services.
In the UK churn fell to 10% at the end of the second quarter to December 31, 2014. It’s the best performance since 2013. Sky will now present its churn figures on a 12-month rolling basis, as is already the case in Germany and Italy.
Churn is also falling on the European continent; In Germany, the number of customers leaving the service fell to 8.3%, a significant reduction of 310 basis points year on year.
It follows a change in the approach to customer acquisition, which included the introduction of two-year customer contracts.
Churn fell in Italy too, at 10% at the end of Q2, down from 13.1% in the prior year. Here the key driver was the number of customers connecting their boxes to the internet. At the end of December, 1.4 million customers were connected, a 50% increase year on year.
“Alongside our continued strength in the UK and Ireland, the acquisition of Sky Italia and Sky Deutschland gives us an expanded opportunity for growth. Both businesses had a strong quarter, Germany posting its highest ever customer growth and Italy showing resilience with good customer growth in a challenging economic environment. Integration is progressing well and we are excited about the potential for the three businesses to be even stronger together,” said Sky chief executive Jeremy Darroch.
The UK was described as having an “exceptional” Q2. The highest product growth in four years at more than 1 million, 17% higher than the same period last year.
TV growth more than doubled to 202,000 and there was good growth in broadband with 106,000 additions. Now TV transactions trebbled after the introduction of a new weekly sports pass.
In Italy, customer growth of 30,000 in the quarter was the highest since Q1 2012 while total paid-for products increased by 47,000. HD accounted for much of this growth with net additions of 35,000 in the quarter, taking HD penetration to 66% of the base versus 55% last year.
Sky in Germany delivered record retail customer additions of 214,000 in Q2, 55% more than the prior year and taking the total retail customer base past the 4-million milestone.
Paid-for products grew by 421,000, more than double the growth for the same period last year. Within this, HD continued to grow strongly with growth of 148,000 in the quarter.
