Pick and mix “Skyfall” for BSkyB

BSkyB may be just a few weeks away from launching its all-James Bond movie channel but one investment banker is marking down its longer-term view of BSkyB’s share price, saying that it is dropping its previous 650p target to 630p, as it “believes the [higher] valuation fails to reflect the challenges ahead”.

Berenberg Capital Markets, and its senior media analyst Sarah Simon, says that a combination of market maturation, rising competition and structural change means “that the stock should not trade at such a premium to the sector.”

Indeed, Berenberg adds that the addition of new players such as YouView, plus ever-busier activity from the likes of BT and TalkTalk “will further strengthen the offer, whether they are kept exclusively or offered at preferred pricing to customers of BT’s fibre service. Meanwhile premium movie content is now widely available thanks to LoveFilm, Netflix, Blinkbox and Sky’s NOW TV.” Simon argues that the shift away from “buy through” might now be starting, and she sees Pay-TV increasingly being available on what she describes as a ‘pick and mix’ basis.

Worse, perhaps, is Simon’s view that Sky’s fibre position is “not sustainable”.

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