Sky Deutschland upbeat amidst increasing losses

November 12, 2009

Due to increasing programme costs and lower revenues, Sky Deutschland reported higher losses during the third quarter of the year. Total revenues decreased to €208.5 million in Q3 2009 (€221.9 million in Q3 2008). Due to higher programme costs and higher sales and marketing expenses, total operating expenses increased to €296.5 million (€248.9 million in Q3 2008).

As a consequence, EBITDA decreased to negative €87.9 million (negative €27.0 million in Q3 2008) and losses for the period amounted to €116.7 million (as compared to €89.1 million in Q3 2008).

The broadcaster remain positive for the future. “Since the launch of the Sky service on July 4, the Sky brand has already reached an awareness level of 66% by mid October, which is a strong lift from the 25% awareness prior to launch. Sky Deutschland implemented a number of sales initiatives for subscriber and ARPU growth, for example an expansion of its retail sales network by increasing the number of points of sale from 3,500 before launch to more than 7,000, and expanding its team of sales representatives.”

For the upcoming Christmas period, Sky will emphasise the HD services with now 7 channels in HD available as well as “the extensive choice and quality of programming.” Sky Deutschland will continue to expand its HD service, starting with an additional four channels in mid 2010.

Subscriber figures from the premium broadcaster in Q3 2009, show an increase of its subscriber base by net 67k subscribers and a total of 2.431 million direct subscribers at September 30, 2009. Net growth of 93,000 monthly contract subscribers was offset by a reduction of 26,000 Flex subscribers. Churn rate for Q3 2009 was slightly higher at 23.3% versus Q2 2009 (22.4%) and still reflects the phasing out of deeply discounted and Flex subscribers. Compared to Q3 2008, gross additions increased by 46% to 201,000 in Q3 2009. Gross additions of monthly contract subscribers – excluding Flex – went up by 58%. Programme ARPU increased further to €25.77 in Q3 2009 from €25.20 in Q2 2009.