Revenue up 9% but net profit falls
The stock price of News Corp.-controlled U.K. pay TV operator BSkyB jumped 4.5% on Wednesday to £7.10 ($11.22) after it published robust results.
Revenue was up 9% to $2.7 billion in the quarter ended Sept. 30, although net profit fell 1.3% to $356 million. BSkyB grew its subscriber base 77,000 to 10.4 million, and average revenue per user rose 5% to $844.
The key to the company’s continued revenue growth during the economic downturn was the strength of its telephony and broadband services. “We are less reliant today on TV additions to deliver continued good growth in products, customers and revenues,” chief exec Jeremy Darroch said.
The pay TV offer was boosted by the growth of HD programming, the launch of Sky Go for mobile platforms and computers and stronger TV content, including the purchase of U.S. series “Terra Nova” and the launch of U.K. comedy “Trollied.” All this offset the effects of the gloomy economy.
Programming costs were up 11% to $845 million. Viewership was up 13% in subscribers’ homes. Subscription prices have been frozen for a year.
BSkyB has had to navigate turbulent waters recently.
First there was the attempt by News Corp. to buy the 61% share of BSkyB stock it does not already own, which was hotly contested by media rivals and finally derailed by the phone-hacking scandal at News Corp.-owned tabloid the News of the World. The scandal continues to cast a cloud over the position of James Murdoch, who is deputy chief operating officer of News Corp. and chairman of BSkyB.
This month the European Court of Justice ruled that BSkyB’s ownership of pricey U.K. rights to English Premier League soccer matches did not protect it from competition from foreign channels offering the same matches in the U.K. for a lower price.