A fresh look at BSkyB’s half-yearly results by investment banker Morgan Stanley points out that BSkyB is creating a new market out of “pay-TV Lite” potential subscribers, and is making money out of this new sector.
The report cites the post-results presentation made by CEO Jeremy Darroch and his team. “A key theme of Sky’s presentation was the broadening of its revenue growth potential into new services such as SkyLite (Now TV) and transactional (Sky Store) as well as into adjacent markets. The responsiveness of customers to BSkyB’s investment in connected services (+1m boxes connected in Q2) may mean Sky increases its investment above the initial £60 – £70 million planned level in FY2014 (£40 million spent in H1 14),” stated the bank.
These newish products translated well into Sky’s revenues. “Sky has just grown H1 revenue by 6.3 per cent with the number of paid-for products having risen by 13 percent y-o-y,” says Morgan Stanley. “Sky has a total retail customer base of 11.2m, 2.9 RGUs per sub (out of 7) and just 36 per cent of its customers take triple play. Sky’s theme is that its growth will be broadly based and does not all revolve around football. There is growth potential in ‘pay TV Lite’ (Now TV, Sky Go Extra) amongst the 13 million Freeview users, in transactional revenues as connected boxes roll out (Sky Store) and in new adjacent markets. (SkyBet, AdSmart).”