Sky reports 10% revenue increase despite disappointing advertising growth

BSkyB has reported a 10% increase in revenues, bringing its annual total to £4.5bn by the end of year concluding June 30. During this period, a net 406,000 new subscribers signed up to Sky taking the total to 8.58m.

The broadcaster's chief financial officer, Jeremy Darroch admitted advertising was a bit disappointing, only up 3% in total, making the rate of growth lower than in previous years.

Since the broadcaster pulled its channels from Virgin Media's platform in February 90, 000 new customers have joined Sky in its fourth quarter. Although during the last year the Virgin dispute has cost BSkyB approximately £15m. The same amount is predicted again if Sky's programmes continue to be off the cable network. The lack of cable representation has forced wholesale revenue lines down by 7% but BSkyB is now looking to make deals with smaller cable companies, like its recent partnership with Tiscali TV.

Full profits for the year were down 9.4% making £499m and operating profit was down from £877, to £815m. However BSkyB reported more of its customers were choosing Sky products that ever before with Sky+ acquisitions up 821,000 to 2.37m. High Definition TV, Sky Talk and Sky Broadband were some of the other BSkyB services experiencing a higher uptake.

The satellite broadcaster aims to reach 10 million customers by the end of the decade and to extend product penetration across its range of services including broadband and telephony.

Souce: Media Week