Oct 172013

BSkyB has reported an 8% fall in profits to £285m in the three months to the end of September, as investment in new services and costs incurred in its Premier League battle with pay-TV rival BT took its toll.

BSkyB’s adjusted operating profits were hit by the £2.3bn deal it was forced to make to stop BT from securing the lion’s share of Premier League matches for the next three years, a 40% increase on the last deal, although the company said the dip was “in line with expectations”.

The satellite broadcaster said that the new deal it has with the Premier League sees the amount it pays each year rise by £220m, from the previous £540m a year to £760m.

Investors reacted warmly to the results, with BSkyB’s share price rising 4%, or 34.5p, to 912.5p in early trading.

Sky said that TV viewing of the first 23 live Premier League games was up 20% year on year, which excludes viewing on mobile devices.

BSkyB is expecting another serious challenge from BT when Champions League TV rights come up next year, although Darroch played down the impact of what is expected to be a massive increase in the cost of the previous deal.

TV subscriber numbers, which include subscribers to its satellite TV channels as well as internet service Now TV, rose by 37,000 in the quarter to 10.45m.

Viewing of Sky Sports via mobile TV service Sky Go rose 40% year on year, while watching of movies on the service increased by 50%. Its premium paid-for service Sky Go Extra, which allows customers to register up to four devices and download TV and movies to watch offline for £5 a month, saw users rise 219,000 to a total of 385,000.

Sky HD service subscriptions grew by 642,000, taking the total number of customers to 3.4 million, with growth running at 50,000 a week.

The rapid rise in the penetration of the internet-connected Sky+HD boxes is helping to fuel a surge in on-demand usage.

There was a fourfold increase in weekly downloads through Sky’s on-demand services, while movie rentals via Sky Store have doubled

Programming costs were up 6% to £622m, due to a “step-up” in Premier League costs and investment in original UK TV commissions.

Advertising revenues rose 7% to £102m.