LONDON — Tuesday’s record temperatures in London cooled a tad, but BSkyB CEO Tony Ball delivered a hot set of numbers for the year ended June 30.
For the first time the satcaster passed the £3.2 billion ($5.1 billion) revenue mark in a year, up 15%, with strong fundamentals in all key areas.
Ball told analysts the current 6.85 million satellite subscriber count is “only a few weeks away” from hitting the 7 million target. “Here’s another target,” he said: “We’ll be at 8 million by December 2005 and delivering £400 ($640) average revenue per subscriber.” Add in cable and Ireland subs, and Sky’s current pay TV reach is 10.7 million homes.
Brits scoop up dish
BSkyB’s all-digital transmission means the U.K. now has 44% digital penetration of homes, compared to 13% in Europe and 17% in Japan.
BSkyB’s 8 million sub forecast is higher than analysts predicted. Ball merely responded, “The analysts are not running the company.”
He said only about half of U.K. homes subscribed to pay TV and said Sky had identified about 6 million non-subscribing homes, drawn from both young and mature families, as its main target for growth. “We only have to get 17% of that number and we’ll do our 8 million.”
BSkyB’s 9.4% churn rate, down from 10.5% in 2002, is an industry best.
Sales of Sky Plus, the company’s personal video recorder, stands at 105,000. “We own this category,” he said, “and it’s going to get bigger.” BSkyB will have a major marketing push this fall for the service, and he said he expected 300,000 subscribers to be in place by Christmas 2004.
However, payments to suppliers are under pressure. Ball said BSkyB was talking to Hollywood studios about their definition of a movie megahit (which costs more to license) and was seeking to reduce BSkyB’s cost per title. “Long-term we are seeking major savings, or else we’ll drop a studio,” he warned.
In the year ended June 30 BSkyB paid Hollywood $636 million (up from $575 million a year ago), due to a 31% increase in pics described as megahits.
Currently Viacom’s key channels — MTV, Nickelodeon, VH1 and Comedy Central — are under negotiation, and contracts are up next summer contracts for National Geographic, Music Choice and Eurosport.
“There’s still downward pressure on these suppliers,” said Ball, adding that last week’s $1.6 billion deal to secure exclusive rights to English Premiership soccer through 2007 was, in reality, a drop in annual terms, from $650 million annually, to $546 million from the 2004-05 season.