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Last Updated: Wednesday, 2 February, 2005, 17:20 GMT
Subscriber growth boost for BSkyB
Sky dish and digital set-top box
BSkyB's digital subscriber base has now reached 7.6 million
Satellite TV firm BSkyB has reported a better-than-expected rise in subscriber numbers and strong profits growth.

A major marketing campaign helped BSkyB to add a net 192,000 customers in the three months to December, against a rise of 62,000 in the previous quarter.

BSkyB said it was on track to meet its target of signing up eight million satellite customers by the end of 2005.

BSkyB lifted its half-year profits to 250m ($470m) from 204m last year while revenues rose 10% to 1.9bn.

Despite shares dipping in mid-afternoon trade amid investor concern about the costs involved in attracting new customers, BSkyB's shares ended the day 3.5 pence higher at 575 pence.

Revenue rise

In the October to December period, Sky's digital subscriber base rose to 7.6 million while average revenues per digital customer increased by 5%.

The first phase of the BSkyB growth strategy has been a resounding success
Lorna Tilbian, Numis

The increase in subscribers was bigger than predicted by City analysts who had expected a jump of about 150,000 customers.

During the period, 168,000 homes signed up to the broadcaster's Sky+ package which combines a set-top box and a personal video recorder.

More than a quarter of these were new subscribers to Sky.

"The business delivered a strong set of results in the first half year with good sales and profit growth," said chief executive James Murdoch.

The broadcaster launched a major advertising campaign in October, emphasising the breadth of its programming, to attract new viewers.

This followed a trailing-off in new subscribers at the end of 2003-4 when take-up fell below 100,000 in three successive quarters.

Marketing blitz

The 'What do you want to watch' campaign is part of an aggressive growth strategy outlined by Mr Murdoch last year.

The campaign contributed to an 11% rise in overall 'customer acquisition costs' compared with the same period last year.

"Today's results demonstrate that the first phase of the BSkyB growth strategy has been a resounding success," Lorna Tilbian, an analyst with Numis, told Reuters.

In recent months, the UK's leading pay-TV operator has significantly boosted its sports programming, a key weapon in its attempt to attract new customers.

It has secured exclusive live rights to show all English Rugby Union domestic internationals until 2010 and all international and domestic cricket in England and Wales from 2006 to 2009.

Mr Murdoch, appointed chief executive in November 2003, has set a target of acquiring a total of ten million subscribers by 2010.

"We are confident of our targets and we think we will be able to get there," Mr Murdoch said on Wednesday.

Why Sky looks set to meet its eight million target

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