BSkyB “reaping the rewards”; expands HBO deal
BSkyB’s latest results, for the quarter and half-year to December 31st, showed improvements in all sectors and in some case were well ahead of expectations. For example, the number of TV ‘paid for’ subscribers grew 77,000 in the three months to December 31st. HDTV subs grew 112,000 in the three months, while the broadcaster’s ‘Sky Go Extra’ service expanded by 258,000. All in all, its total ‘paid for’ RGU’s grew by 873,000.
CEO Jeremy Darroch highlighted that Sky’s new Internet-connected TV services grew by just over 1 million, and Sky Go unique users grew 23,000. ARPU was up £11 to an annualised £570 per subscriber, and Churn was down -0.2 per cent during the quarter-year to 10.8 per cent which was good news, except to say that y-o-y it was up from 10.3 per cent to 10.8 per cent.
Darroch announced that Sky had renewed and expanded its ties with HBO. The collaboration includes an extended content output deal to ensure that Sky Atlantic remains the exclusive home of first-run HBO programmes in Britain and Ireland through 2020. Under the new agreement, Sky and HBO will work together to develop and produce spectacular new drama series for broadcast on their networks in the UK, Ireland and the US. Their goal is to identify projects with the potential to run for multiple seasons and to commission these shows, with production to be jointly funded by the two companies.
The improved numbers helped drive what Sky described as “adjusted revenue” as growing 8 per cent to £3.7 billion, however its “adjusted EBITDA” was flat at £831 million with the position being blamed on investment into connected TV services and the rise in the cost of sports broadcasting, especially Premier League fees.
“We had a very good first six months of the year as we reaped the benefits of our broader-based approach to growth. In a consumer environment that remains challenging, customers continued to choose to take Sky products in ever greater numbers in the run-up to Christmas, with Q2 growth up by over 40 per cent on last year. In the last 12 months, we have added 3.8 million paid-for subscription products, the fastest rate of annual growth in three years,” said Darroch.
“Customer demand in Q2 was strong across the board with good growth in all product. In a good quarter for TV growth, HD passed the milestone of five million customers, boosted by the success of our autumn advertising campaign with Joanna Lumley. Home communications also did well as customers continued to respond to the market-leading quality and value that Sky offers. Total sales of home communications products increased 4 per cent year on year in the first half.”
“The investments we are making to accelerate growth in connected TV services are delivering excellent results. We added a record 1 million connected Sky+HD boxes in Q2 – almost 11,000 a day – to take our base of connected homes to 4.4 million. This explosive growth means that Sky has quickly established itself as Britain’s biggest connected TV platform and, with millions of customers yet to connect their boxes, there is still a big opportunity ahead.”