Sky has again outperformed market expectations by adding a total of 96,000 net new customers in the third quarter of 2010, taking it close to the 10m subscribers mark.
In financial results for the three months to September 30, Sky added 178,000 net new broadband subscribers, bringing its total base to 2.8m. The number of subscribers paying the £10 monthly supplement for Sky’s HD services now stands at over 3 million. The firm also pulled in 203,000 new telephony customers, taking its landline service to 2.5m.
In the highest quarterly growth recorded in the past two years, the Sky+ HD television service brought in 215,000 net new additions, bringing Sky’s total HD base to 3.2m. Over 50 HD channels are now available on the Sky platform, watched by net additions of 215,000 in the first quarter of BSkyB’s financial year, and a total of 3.2 million customers.
Overall, the satellite broadcaster attracted 96,000 net new customers, beating analyst expectations of around 70,000, and taking its total base to 9.956m.
Customers taking a “triple play” service of TV, broadband and telephony increased 36% quarter-on-quarter, constituting around 2.3m of the total subscriber base.
Sky’s quarterly revenue increased 15% to £1.5 billion, with adjusted operating profit up 25% year-on-year to £255m. Average revenue per user grew from £469 to £514 year-on-year.
Buoyed by the strong financial performance, the company also confirmed plans to create 500 jobs through the opening of a new contact centre.
Sky’s chief executive Jeremy Darroch said that the results represent “an excellent performance in a challenging environment”.
“Our focus this quarter on home communications has been rewarded with our highest ever take-up of broadband, telephony and line rental, alongside further good growth in high definition. To support our continued growth, we plan to open a new contact centre next year with the creation of 500 jobs,” he said.
“This performance, combined with our continued emphasis on operational efficiency, is translating into strong financial results. We’ve delivered 15% growth in revenue, 25% growth in operating profit, 33% growth in earnings per share and our operating margin increased for the third consecutive quarter.
“These results are underpinned by continued investment in content and innovation, which is bringing more value to customers and growing returns for shareholders.”
Also today, Sky confirmed that it will start rolling out Anytime+, its new internet-delivered video on-demand service, to millions of Sky+ HD homes from next week.
Stephen van Rooyen, Sky’s deputy managing director of marketing, said: “We’re introducing Sky Anytime+ against the backdrop of another really strong quarter for Sky Broadband with our fastest growth in over two years. Customers are responding to our mix of high quality, great value broadband products. At the same time we continue to increase the number of our TV customers, with millions now opting to take our state-of-the-art Sky+ HD box.”
In the third quarter, Sky’s total advertising revenue increased 46% year-on-year to £102m, thanks in part to the additional income gained from The Living TV Group, which Sky acquired from Virgin Media in June. The Living TV Group contributed £27m in revenue over the quarter – £20m from advertising, £6m from wholesale sales and £1m from “other” sources.
Sky’s programming costs increased by 10% year-on-year in the three months to £482m, largely due to increased investment in sport and entertainment rights.
In early 2011, the firm will launch the new Sky Atlantic channel, hosting content from its recent HBO deal and the new series of Mad Men, poached from the BBC.
Source: various, digitalspy, mediaguardian, broadbandtvnews