BSkyB splashes out £55m extra on marketing to blunt BT

BSkyB splashed out an additional £55m marketing its broadband and pay-TV services in its first quarter as it looked to mitigate the impact of BT’s new Sport service, a move that appears to be paying dividends as the company reports growing demand for its services.

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The company says it added 111,000 new broadband customers in the three months to 30 September, up 9 per cent on the same period last year and added 37,000 new TV customers.

The net increase in customers, coupled with increased take-up of additional services such as mobile service Sky Go and Sky+HD boxes by existing customers helped push revenue up 7 per cent to £1.8bn in the quarter.

BSkyB has been locked in a battle with BT Sport since the latter was awarded the rights to show 38 live Premier League football matches per season earlier this year. BSkyB stepped up activity in the period, which coincided with the start of the 2013/14 season to keep customers that might have been tempted by the new entrant’s offer of free sports channels for its broadband customers.

Marketing costs were up £55m to £320m in the quarter. The additional outlay helped keep churn, the net rate of customers leaving the business, at 11 per cent, up just 0.1 per cent on the same period last year.

The additional spend on marketing and the extra £220m it paid out to secure the bulk of the live Premier League matches on offer did hit profit, however. Operating profit fell 8 per cent to £285m in the period.    


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