Subs sales slump for BSkyB?
Analysts suggest that BSkyB hit something of subscription sales slump in the autumn period, perhaps only achieving net sales of just 26,000. Last year (that is 2010) it signed up 140,000 net new subs.
Sky will unveil its numbers on January 31st, and it must be stressed has a long tradition of over-delivering on many analysts expectations. It is also inevitable that core ‘new sign-ups’ will be harder to achieve as sales on its pay-TV product plateau. Instead BSkyB is doing extremely well signing up triple play consumers to its broadband and telephony products as well as trading plenty of subscribers up to its HDTV service.
Financial analysts are also concerned that new entrants to Sky’s all-important sports arena might well send rights costs up again, and potentially damage its subs base. Al-Jazeera has made no secret of its wish to enter the UK market, and further sports acquisitions from ESPN cannot be ruled out. Investment bankers Morgan Stanley expect “vigorous competition” for key sporting events to start kicking in later this year.
Indeed, the bank’s report finishes up downgrading BSkyB’s share from ‘Overweight’ to ‘Equal-weight’ “on fears of poor newsflow”. It also highlights risk areas for Sky in the shape of further regulatory problems “and a growing focus on unbundling” which might depress the share price, says the report.