Dan Sabbagh, Media Editor
Claim your free 2010 double sided wall chart
BSkyB added 90,000 customers in the second quarter of the year, making gains that were better than expected at the expense of Virgin Media after the dispute between Britain’s two pay-television groups.
The satellite operator did not spell out how many new subscribers it had recruited directly from Virgin, but its rival privately is conceding that it has lost about 40,000, most of whom have switched to Sky. Sky is 39.1 per cent owned by News Corporation, parent company of The Times.
James Murdoch, the chief executive of Sky, said that that it was “difficult to isolate” how many subscribers had switched, but added: “We did indicate that we expected to add 100,000 customers in this half of the year, and we have added 141,000.”
In March, Sky’s basic channels, including Sky One, were taken off Virgin Media’s cable platform after a protracted row over price. Mr Murdoch said that he was “at the negotiating table right now”, but said that “this leadership [of Virgin Media] doesn’t seem to be interested”.
If the private predictions from the Virgin Media camp are correct, it would mean that Sky has gained customers worth £16.5 million annually.
However, it is also expected to lose up to £60 million in annual operating profit in reduced carriage fees and advertising because it is no longer on the cable network.
Sky’s reluctance to attempt to publicly estimate how much it had gained from its principal rival came as it argued that it had made progress against all its principal competitors and that it could keep up an accelerated rate of growth.
Sky added 51,000 in the first three months of the year, rising to 90,000 between April and June, but executives said that customers had a “wide range of reasons for coming to Sky”.
The figures impressed the City, which had been expecting a gain of about 60,000, and the shares rose 28p to 700p, a level that the stock had not hit since mid2004. Sentiment was also boosted by the improvement in average revenues per customer, up £21 to £412 on the year – helped as customers took broadband and telephone products as well.
Sky released the figures a fortnight ahead of the publication of its preliminary results in an effort to highlight the operational performance. It said that operating profits remain in line with expectations, which sit at £755 million to £770 million, although the results presentation is likely to feature questions about the ongoing financial impact of the Virgin row.
A year after Sky began to supply broadband, the company said that it was connecting 716,000 subscribers, up by 259,000 in the period. Of these, 72 per cent are taking one of the paid-for products, which cost either £5 or £10 a month on top of a television subscription.
Executives produced data showing that it had the strongest broadband growth of any of its competitors in the three months to March, after taking a 33 per cent market share during that period. Its number of telecoms customers improved by 171,000 to 526,000, and 318,000 subscribers take all three products: television, telephone and broadband.
Mr Murdoch used the data to argue that Sky was competing successfully despite a welter of regulatory inquiries. “Does that look like a business under siege?” he said in response to questions about pending inquiries relating to the purchase of a 17.9 per cent stake in ITV and attempts to introduce a paid-for service via Freeview. “Of course our investment in ITV was going to draw regulatory scrutiny,” Mr Murdoch said, adding that complaints from rivals about its Freeview plans were predictable. “It’s pretty transparent what’s going on there,” he said.
Channel vision
— Total customers: 8.58 million (up 90,000)
— Sky subscribers: 2.37 million (up 207,000)
— High-definition subscribers: 292,000 (up 48,000)
— Multi-room subscribers: 1.34 million (up 46,000)
— Telephony subscribers: 526,000 (up 171,000)
— Churn rate: 12.1 per cent (down 1.6 per cent)
Articles from our sister site WSJ.com:
You may be asked to subscribe to read certain articles
Industry sectors news at a glance. Interactive heatmap, video and podcast
Everything the Business Traveller needs to know to make a better trip
Get ready for the winter sports season, with our resort guides and snow reports
We are backing British business, what is the confidence of the nation and what businesses are succeeding?
Growing demand for energy, oil that is harder to reach and the rise of carbon dioxide emissions. We examine the energy challenge
With rail travel in Europe on the rise, we review the benefits of travelling by train
In this special section we explore new food trends to help improve your dinner party and impress guests
Enjoy further reading from Travel to Fashion, Business to Sport, discover more
1998
£47,955
2004
£56,950
Essex
Check your free Experian credit report before applying
Car Insurance
c. £70,000
The Duke of Edinburgh’s Award
Windsor
£123,460 pa
The Law Commission
London
Southwark County Council
£100,000
Home Office
Liverpool
Moments from Battersea Park.
For sale with Winkworth
Find out about shared ownership.
See your free Experian credit report beforehand
Includes flights, accommodation with room upgrades, transfers city tours in Hong Kong and Bangkok.
PremierHolidays.co.uk
For your ultimate tailor-made ski holiday, click here
Get covered on your travels with a superb range of policies at great prices. Visit InsureandGo.com
Choose from the beautiful landscape and tranquil beaches of Oahu, Kauai, Maui & Big Island.
Contact our advertising team for advertising and sponsorship in Times Online, The Times and The Sunday Times, or place your advertisement.
Times Online Services: Dating | Jobs | Property Search | Used Cars | Holidays | Births, Marriages, Deaths | Subscriptions | E-paper
News International associated websites: Globrix Property Search | Milkround
Copyright 2009 Times Newspapers Ltd.
This service is provided on Times Newspapers' standard Terms and Conditions. Please read our Privacy Policy.To inquire about a licence to reproduce material from Times Online, The Times or The Sunday Times, click here.This website is published by a member of the News International Group. News International Limited, 1 Virginia St, London E98 1XY, is the holding company for the News International group and is registered in England No 81701. VAT number GB 243 8054 69.