Sky hails ‘major development’ in move towards future without satellite dishes
The group said it will launch a broadband service for its channels in Italy followed by Austria this year allowing access without a satellite dish.
Pay-TV giant Sky has taken another step towards ditching the dish after confirming the rollout of a fibre-optic broadband service as it reported a hike in earnings and revenues.
The group said it would launch a long-awaited broadband service for its channels in Italy followed by Austria this year allowing customers who cannot or do not want to install a satellite dish access to its full TV service.
It will follow with the UK and the rest of its key markets in what it hailed a “major development” for the group which will give it greater might to compete against online players Netflix and Amazon Prime.
Details of the plan, first revealed a year ago, came as the group posted a 10% rise in underlying earnings to £1.1 billion for the six months to the end of December as it added 365,000 new customers.
The figures came days after Britain’s competition watchdog provisionally found that 21st Century Fox’s £11.7 billion bid to take full control of Sky was not in the public interest.
The Competition and Markets Authority (CMA) said the deal would hand Fox owner Rupert Murdoch and his family too much control over UK news media and is looking at remedies before making its final decision by May 1.
Sky’s interim results showed the group’s customer base stands at 22.9 million after the half-year performance, having added 2,000 customers a day.
On a reported basis, operating profits rose 24% to £573 million, while revenues lifted 5% to £6.7 billion thanks to a boom in demand for pay-as-you-go products.
Sky reported an 8% hike in pay-as-you-go products sold, such as one-off films and sporting events including through Now TV, at 20 million in the half-year.
It also announced the launch of a low cost plug-in stick for its Now TV streaming service, in a further move to take on online rivals.
Chief executive Jeremy Darroch cheered an “excellent” set of results against a difficult consumer market, with household finances under pressure.
He said: “This performance reflects the investment choices we have made in recent years, allowing us to more than offset the pressure on consumer spending across Europe.
“Looking ahead, we expect the consumer environment to remain challenging, however we remain confident in our strategy and our ability to execute our plans.”
Mr Darroch said Sky had continued to keep a lid on costs through efficiency savings, but would remain focused on investing in original content “each and every year”.
Viewing on Sky channels rose 6%, boosted by the success of its Sky Original productions.
Customer churn also improved, falling to 11.2% from 11.6% a year earlier.
But the results come at a tense time for the broadcaster amid speculation that Sky News may be closed to see the Fox deal approved.
Mr Murdoch – who also owns newspapers including The Times and The Sun – will have to find a way to appease the CMA, which could include spinning Sky News off, protecting its editorial independence, or closing the channel.