1m homes now have Sky+ HD
Thursday, April 30 2009
By James Welsh
Sky now has 9.32m households, 1m of which take its high definition Sky+ HD product, the company announced this morning.
In a results report for the three months to March 31, the pay TV operator reported net customer growth of 80,000, up 43% from the same quarter last year. That figure was well ahead of City forecasts of approximately 50,000 net additions. Churn stood at 10.6%, lower than analyst expectations.
Some 1.4m customers, 15% of the total base, now take all three of Sky's television, broadband and telephony service. 5.1m homes are equipped with some form of Sky+; 4.1m take the standard definition box and 1m the high definition product. The growth in total customers and the mix of Sky services they take - particularly premium products such as Sky+ and Sky+ HD - helped push average revenue per subscriber from £424 in the first three months of 2008 to £452 in the same period this year.
In a statement, Sky chief executive Jeremy Darroch said: "We have made a strong start to calendar 2009. In difficult times, customers are making careful choices and responding to the combination of quality and value that we offer. Over 9.3 million families now choose Sky and they are taking more products from us than ever.
"We are progressing well against the priorities we set out in January. The combination of the long-term trend towards high definition and the launch of our new HD box strategy generated a huge response from customers. Over one million customers now subscribe to our high definition service and around a quarter of new Sky+HD customers were new to Sky. In total, almost one in five homes in the UK use Sky+ to get more from their TV viewing experience. As a result of this strong demand, we have already been able to create around 750 new jobs in our customer service and installation teams, as part of the 1,000 we announced in January."
Sky said it was able to manage costs to offset its £60m spend on making Sky+ HD available to customers at a far lower price point, resulting in a 13% increase in operating profit during the first nine months of its current financial year. The company explained: "We announced a reduction in the price of our Sky+HD box to a new everyday low price of £49, which we expected to increase the acquisition or upgrade costs for a high definition customer by approximately £100. The actual acquisition and upgrade costs per customer have been in line with these expectations, leading to associated cost in the third quarter of around £60 million. This upfront investment in accelerated HD growth generates a significant and recurring revenue stream through ongoing monthly revenue from the HD pack subscription as well as new customer ARPU. In addition, the growth of Sky+HD will create a larger installed base of our most advanced boxes, providing us with a platform for further innovation and the launch of new services for customers over time."
Despite the solid results, Darroch warned that 2009 would be "challenging".
"In this environment, and at a time when people are spending more time at home, we will continue to provide our customers great entertainment and money-saving broadband and telephony," he said. "At the same time, we will stay focused on cost efficiency to allow us to invest sensibly in areas that drive long-term value for the business, such as high definition, with the objective of emerging stronger from the downturn."