BSkyB posted £3.75B in adjusted revenues for the six months ended December 31, 2013, up 7.6% on the comparable period in 2012, the company said this morning. Operating profit dropped 8% to £595M compared to the same period the year prior. Still, that was slightly better than the £586M some analysts had predicted as Sky faces increasing rivalry from BT over sports rights. Adjusted earnings (EBIDTA) were stable at £813M. Of note, there was strong demand for subscription products including TV, telephone and broadband with 873,000 signed up in the last three months of 2013; 42% more than the similar period in 2012. The operator now has over 5.1M broadband subscribers. Churn, one of the elements that investors are keeping a close eye on, was 10.8% for the period, up .5%, but down .2% for the final quarter. On-demand usage also increased threefold in the last quarter. Shares in the 21st Century Fox-controlled pay-TV provider were up 4.6% in morning London trading.
Earlier this week, BSkyB said it was adding ITV Encore, a pay channel devoted to drama series from the UK broadcaster that’s home to Downton Abbey, Broadchurch and Mr Selfridge. Today, BSkyB announced an important deal with HBO which extends its exclusive output deal through 2020 and under which the partners will co-develop and co-produce big-ticket original drama series. But the group has also been engaged in a battle for sports rights with comer BT. In 2012, the rivals paid a combined $4.8B to divvy up 154 live Premier League matches for three years. (Prices will be higher next time they meet at auction in 16 months.) In November, BT won the exclusive broadcast rights to 350 UEFA Champions League and Europa League soccer matches per year from the 2015/2016 season, plunking down $1.4B for the honor. However, BSkyB said today that Sky Sports was at its highest viewing levels in six years over the reporting period. Sky Sports today also announced six long-term rights agreements across various disciplines including Super League rugby, England overseas cricket, Scottish football and speedway. It has also entered a five-year deal beginning in 2015 to offer over 600 hours of content a year from the WWE. CEO Jeremy Darroch said, “We are moving through a year of investment in which we are absorbing the one-off step up in Premier League costs well, with adjusted EBITDA flat thanks to a continued focus on operating efficiency… We continue to see significant opportunity for accelerated growth and returns as we use our innovation to differentiate our offering and give Sky customers the best ways to enjoy our content.”
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