LONDON — British Sky Broadcasting saw its pre-tax profit drop 8% to £74.7 million ($124 million) in first three months of 1998, as increasing program costs coincided with a slowdown in subscriber growth.
Sales grew 14% to $611 million in the three months to March 31, which is the third quarter of BSkyB’s financial year. Over the nine months, sales were up 18% to $1.76 billion, and profits were down 6% to $337 million.
The satcaster is gearing up for the launch of its digital platform to its existing analog subscribers this summer, followed by the full consumer launch in the fall.
The costs of preparing for digital combined with startup losses from joint venture channels such as Granada Sky Broadcasting, the History Channel and Paramount Comedy to dent the satcaster’s figures.
It was also hit by a $148 million increase in the price of its sports rights over the nine months of the financial year so far, and a $73 million hike in marketing expenses.
The satcaster has now set up Sky Ventures as an umbrella for all the channels in which it is partnered with other shareholders.
In the three months to March, BSkyB’s subscribers increased by 107,000 to 6.8 million. But only 2,500 of these new subscribers were hooked up by satellite dishes, with the remainder signing up via cable, where BSkyB’s margins are much smaller.