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–Sky+ DVR Achieves 16 Percent Penetration of DTH Subscriber Base
–Sky by Broadband off to Strong Start

UK satellite TV provider, BSkyB, has released subscriber acquisition totals, financial results, and other data for its fiscal second quarter and half-year, ended December 31st:
–During the quarter, the company added 215,000 net new DTH subscribers (this was its largest quarterly subscriber gain in three years), compared to 192,000 for the year-ago period. At the end of the quarter, it had 8.1 million subs, compared to 7.6 million at the end of the year-ago quarter. Gross DTH subscriber additions for the quarter, meanwhile, at 426,000, were up 15% from the year-ago quarter.
–It added 254,000 new subscribers for its Sky+ DVR during the quarter, compared to 168,000 for the year-ago quarter. At the end of the quarter, Sky+ subscribers totaled 1,281,000–representing 16 percent penetration of the company’s DTH subscriber base–compared to 642,000 at the end of the year-ago quarter. In a conference call with analysts and media following the release of Sky’s results, CEO James Murdoch, refused to rule out the possibility that the company may eventually distribute Sky+ boxes free of charge: "We don’t rule out pricing or promotional initiatives," he said. However, he stated that the company has no immediate plans to give the boxes away.
–It added 158,000 multi-room subscribers during the quarter, compared to 116,000 for the year-ago quarter. At the end of the quarter, multi-room subscribers totaled 906,000–representing 11 percent penetration of the company’s DTH subscriber base–compared to 473,000 at the end of the year-ago quarter.
–The company says that its Sky by Broadband service, which launched January 10th (see [itvt] Issue xxx), and which delivers on-demand movies and sports content free of charge to Sky Movies and Sky Sports subscribers respectively (note: the service is delivered over peer-to-peer grid delivery technology from Kontiki), is already proving successful: in the first three weeks after its launch, around 52,000 customers joined the service, downloading over 70,000 movies between them. The most popular movie downloads were "Layer Cake," "I Robot," and "The Girl Next Door."
–It says that the Sky Mobile TV service, which it launched in partnership with Vodafone on November 1st, and which has been offered free of charge for a three-month period, is also proving successful: during the 10 weeks to January 10th, Vodafone customers accessed over five million streams of content on the service (a total of 19 channels of content are available). Sky plans to offer the service on other mobile networks later this year. (Note: last month, Sky also launched Sky by Mobile, a service which is available free of charge to eligible Sky customers, and which provides mobile video; sports, news and entertainment updates; and the ability to access one’s Sky Bet account. Later this year, Sky says, the service will allow Sky+ subscribers to schedule recordings remotely.)
–Annualized Average Revenue Per User for the quarter was £397, up £12 from the preceding quarter.
–Annualized DTH churn for the quarter was 10.6 percent, representing a reduction of 1.1 percentage points from the preceding quarter.
–During the half-year ended December 31st, overall revenues totaled £2.14 billion, representing a 9 percent increase over the same period last year. DTH revenues, meanwhile, totaled £1.55 billion, again representing a 9 percent increase over the comparable period.
–Revenues from the company’s interactive wagering service, Sky Bet, totaled £136 million for the half-year, representing a 15 percent increase over the comparable period. The company attributed the increase to an increase in the revenues generated by its Sky Vegas service "following the launch of a number of new casino-style games."
–Revenues from the company’s Sky Active interactive TV service for the half-year, at £46 million, were broadly equivalent to the totals for the comparable period. The company said that growth in revenue from interactive advertising and enhanced TV was offset by a reduction in revenues from other areas of the business, including the SkyBuy retail service, which was closed down in the fourth quarter of the previous financial year.
–Profits for the half-year totaled £274 million (up 12 percent from the comparable period), generating earnings per share of 14.9 pence (up 17 percent from the comparable period).

The company says that its priorities for the first half of 2006 (i.e. for its fiscal second half) include "development and preparatory work for the launch and roll-out of residential broadband services" (note: Sky, which recently acquired ISP, Easynet, is expected to use the latter’s infrastructure, which it is in the process of upgrading, to offer an IP VOD service), as well as the launch of HDTV service, and the migration of its entire subscriber base to its new CRM system. Because it believes the benefits of these initiatives will start to accrue in the run-up to next Christmas, it expects that it will see more subscriber growth in the second half of the calendar year than in the first; however, it says that it expects to add around 100,000 net new subscribers by June 30th (it added 178,000 during the equivalent period last year). It says that it remains on track to achieve its medium-term targets of 10 million subscribers by 2010, with 25 percent Sky+ penetration and 30 percent multi-room penetration.

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