BSkyB’s marketing drive pushes revenue up

BSkyB’s marketing costs topped £1bn last year, helping drive revenue and customer numbers up.

HBO show Sex and the City
HBO show Sex and the City

The pay-TV company says revenue increased by 11% to £5.9bn in the 12 months to 30 June.

Operating profit rose to £1.9bn, up from £813m last year.

The increases were driven by net customer growth of 90,000 leaving the company just short of the 10 million mark on 9.8 million.

Churn, the percentage of customers who dropped the service, was just 10.5%.

Sky’s marketing strategy to push its high definition (HD) services also appears to be paying off with 429,000 new additions in the final quarter of the year.

Marketing costs reached £1.1bn last year, up from £907m in the same period a year earlier.

The company says the increase reflects the “volumes of HD additions doubling year on year and our policy of expensing customer acquisition costs upfront.”

Jeremy Darroch, chief executive of BSkyB, says the year was a “good” one for the company.

“The economic outlook remains uncertain and, against that backdrop, we’ll pursue the consistent set of priorities that have served us well so far. Executing on these plans will build a larger, more profitable business for the long term,” he adds.

The strong performance will strengthen BSkyB’s position as it looks to attract a higher offer from News Corporation.

The latter has proposed to buy the 61% of BSkyB it does not already own for 700 pence per share but Sky’s independent directors want over 800p.

The media company announced it had struck a deal with HBO to show the US cable channel’s new programmes in the UK.

Previous HBO shows include The Wire, Curb Your Enthusiasm, The Sopranos and Sex and the City.

It also confirmed it will launch Sky 3D, “Europe’s first” 3D channel, on 1 October.

Rival Virgin Media recently reported revenue increased 7% to £964m in the second quarter.

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