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Friday, 3 November, 2000, 17:57 GMT
Broadcasters row over BSkyB claims
Sky Sports
Sky's Premier League coverage: costs must be recouped
A battle of the broadcasters has broken out over BSkyB's latest investors briefing, which claims the firm's in-house Sky channels have overtaken ITV in a key market for the first time.

ITV's advertisers can't be very happy

BSkyB spokesman

ITV has condemned as "very selective" data showing that Sky broadcasts attracted a 19% audience share among subscribers to BSkyB's digital satellite services.

ITV, which has an audience share of more than a quarter among UK viewers as a whole, gained a share of only 17.3% in Sky Digital homes, the results briefing said.

Meanwhile ONdigital, the broadcaster backed by Carlton Communications and Granada Media, has called on trading watchdogs to investigate price rises also outlined in BSkyB's latest profits statement.

The increases are "unjustifiable" and an "abuse of Sky's dominant position in the provision of sports and movie channels", ONdigital said, demanding an inquiry by the Office of Fair Trading.

Ahead of target

The complaints followed the release on Friday of BSkyB's profits statement for the three months to the end of September, which showed the firm is set to break the 5 million mark for satellite subscribers ahead of schedule.

Rupert Murdoch
Rupert Murdoch: his News Corp owns 37.5% of BSkyB

But the figures revealed that the company, which is 37.5% owned by Rupert Murdoch's News Corp, has paid a price for boosting subscriptions and revenues.

BSkyB ran up a loss of 123.6m between July and September, compared to a 13.6m deficit in the same period in 1999.

Marketing costs alone rocketed by more than one third to 104m.

ITV fights back

ITV said that between May and September it won a 25% audience share in Sky digital homes, a figure "on a par with BBC1 and way ahead of the other terrestrial channels".

With figures like that, it's not surprising that Sky want us on the platform

ITV spokeswoman

ITV, which has so far refused to be broadcast on the Sky Digital platform, said it had increased its audience share in peak time in October.

"With figures like that, it's not surprising that Sky want us on the platform," the ITV spokeswoman said.

Sky Digital customers currently have to switch back to analogue channels to view ITV programmes.

But a BSkyB spokesman said the viewing figures show that "when viewers are offered all the services that Sky Digital can offer, they choose Sky Digital.

"ITV's advertisers can't be very happy," the spokesman told BBC News Online.

ONdigital agreement

ONdigital, which carries Sky broadcasts, said BSkyB was unjustified in raising prices from 1 January without consultation.

But BSkyB said it was abiding by the terms of an agreement ONdigital signed in 1997.

"If they had any concerns, they should have raised them then," BSkyB told BBC News Online. "It is the same structure as the one we give cable companies."

"We pay an awful lot for things like Premier League [football] coverage and we have to pay for it somehow."

For individual viewers, the rise will add up to 4 a month to subscription bills.

A spokesman for the OFT, which in January opened an investigation into BSkyB's position in the pay TV market, said the office would consider ONdigital's complaint once it was received.

Cable decline

BSkyB's figures showed it's total number of subscribers grew modestly to 9.24 million, with the rise in customers to digital satellite services offset by a decline in the cable market.

Results snapshot
Pre-tax loss: 123.6m
Revenues: 520m (up 33%)
Total subscribers: 9.24m (up 2.7%)
Satellite subscribers: 4.72m
Cable subscribers: 3.05m (down 8.9%)

The company in September struck a programme supply deal with NTL, the UK's largest cable firm, in an effort to bolster viewers.

BSkyB sees its satellite market, where it exercises more control, as its most important.

"It allows us to offer a greater service to customers - pay-per-view programmes, interactive capability, home banking," the firm's spokesman told BBC News Online.

"It is much more value [to us] to have that kind of relationship with customers."

BSkyB shares closed up 47p at 1051p.

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