Pay TV: “Subscribers are upgrading”
September 14, 2012
For some European pay-TV broadcasters their growth patterns are slowing as subscriber numbers reach maturity levels. A new report from investment bankers Morgan Stanley says this is not a major worry for the likes of BSkyB, given that their recent financial numbers show that there’s plenty of cash still to be extracted from the viewers’ back pocket.
The bank says that the key feature of this year’s H1 results is that the environment remains remarkably robust for the pay TV operators with continued pay TV subscriber growth in the face of economic pressures and weak consumer markets.
“In Germany, [there’s] intense interest in HD, SkyD’s improved customer proposition and lower box prices are transforming the outlook for Sky-Deutschland. Recommendation levels are high and subscriber momentum is good as German consumer interest in a better TV experience picks up. SkyD is seeing strong growth in Sky Plus, SkyGo and Multiroom. This and the good growth also being seen in digital TV by cable operators suggest that the German market critically is becoming more accepting of pay TV.”
“SkyD’s Q2 HD adds were 101k and it is now taken by 37 per cent of SkyD customers. Sky Plus customers reached 584k – up 403 per cent on last year. Multiroom is now at 248k (up from 93.5k in Q2 2011) and SkyGo log ins were 6.9 million, versus 1.3 million in the equivalent period.”
“At BSkyB, in a much more mature market, TV adds were 20k in calendar Q2 but the desire of the base to upgrade to HD is reflected by the 120k HD additions with Multiroom chipping in a further 24k. Despite fears of new competitors, price increases at an average of 2 per cent were pushed through by BSkyB (concentrated in the TV packages).”
“SkyD CEO Brian Sullivan observed that SkyD is unlikely to take immediate price increases but fees it has more pricing power over the next two/three years. The other key feature of the Sky results was the new £500 million cash return which, with the existing £750 million return from 2011/12 means the company will have returned £1.25 billion to shareholders by the end of their current financial year (June 2013).”