Go to Admin » Appearance » Widgets » and move Gabfire Widget: Social into that MastheadOverlay zone
BSkyB’s Q3 results, due on May 2nd, are likely to disappoint the market, says a client note from Berenberg Bank. The current quarter-year is expected to be “slow” in terms of customer acquisitions, and this includes broadband net additions which could slump (y-o-y) by as much as 50 per cent, says the bank. It also looks as if the competition from arch-rival BT Sport is beginning to make its presence felt as far as UK viewers are concerned.
The net results will show that BSkyB’s share of the UK’s new customers will fall from last year’s 54 per cent to around 39 per cent this year. The bank’s advice to clients results in an overall “sell” note as regards the broadcaster’s shares.
The major worry for the bank is the growing importance of BT Sport in terms of UK sports rights. “While BSkyB’s management has stated on a number of occasions that BT’s strategy to offer sports content free to customers signing up for its broadband (“the BT Sport strategy”) has not affected the company, these figures tell a different tale, in our view. BSkyB’s share of net additions is falling, with BT the beneficiary in this highly competitive, and mature, market. We note that our telecommunications research team assume that BT’s share of net additions in calendar Q1 will be 73 per cent, up from 48 per cent in the same quarter last year. BT has been very clear that its BT Sport product is aimed at driving an increased share of net additions, lower churn, and potential upsell to TV. As far as the first two of these points is concerned, BT has ticked the box, in our view. TV will likely take longer, as the product has been completely repositioned.”
“With this in mind, we believe that the upcoming competition for Premier League rights will be intense. For BT, having only recently captured the Champions League for a considerable premium, it makes absolutely no sense to cede any of the Premier League rights that it already holds (this would be a case of two steps forward, one step back), while the fact that all rights have to be bid for on a package-by-package basis means that bidding will be necessarily on multiple packages, rather than just on the ones that are already secured,” says the bank.
“We do not, meanwhile, believe that BT and BSkyB will reach a wholesale agreement, which would obviously mitigate the price inflation on the Premier League rights. If BT were to wholesale its channels to BSkyB – a precondition of BSkyB wholesaling Sky Sports to BT for viewing via the YouView box – then it would lose the ability to control the fact that BT Sport is only free to those who take BT Broadband. BSkyB could choose to offer the channel for free to its customers, and the entire BT strategy would unravel,” Berenberg suggests.