HD, ads and sport hit Sky TV NZ’s profits
Rose Major 22-02-2009
Four major one-off costs in its fiscal half-year, plus investment in a high definition service, have hit the bottom line of News Corp-backed Sky TV New Zealand. But the company claims it is otherwise buoyant.
Net profit after tax for the six months to Dec 31 2008 was NZ$42.6 million a decreased of 16.7% on the previous year. As well as the one-off operating costs, Sky NZ also conceded advertising revenues at its free-to-air channel Prime were down considerably, dropping 11.9% to NZ$12.6 million.
Operating costs increased by 14.6% to NZ$261.9 million. Contributing factors were the marketing costs associated with the launch of the high definition platform, MySkyHDi in July 2008; coverage of the Rugby League World Cup in November 2008; an expensive new talent show, the NZ$4 million New Zealand’s Got Talent on Sky’s free-to-air channel Prime which aired during the Olympics to try to shore up Prime’s viewership against TVNZ; and the All Black rugby team’s tour of the Northern Hemisphere.
But the extra costs seem to have helped, with the higher operating costs also partially attributable to increased subscriber numbers and promotional discounts given for new subscriber installs. Sky added 10,493 new subs in the half-year to reach 759,069, compared with a net gain of 9,708 for the comparable period. The period after the reporting date has been even more positive, the company said, with 11,703 additional subs as of Feb 12, compared with 6,798 over the same period last year.
The investment in the HD platform also seems to be paying off, with 51,482 new MySkyHDi subs at the end of 2008, with a “significant number” migrating from the standard-def platform.
Total revenue increased by NZ$17.6 million to NZ$346.3 million.
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