Tuesday, 25 October 2011

Sky TV makes an average of £535 per customer per year in the UK

"Sky is a machine. The economy may be tough, and Sky may have felt it necessary to freeze prices. But the broadcaster doesn't have to worry when the average take per customer is a hefty £535 a year. Meanwhile, although the household growth rate is slowing (26,000 in the quarter when the new football season started), turnover is up by 9% in the quarter to 30 September and operating profit ahead by 16% at an adjusted £295m.
When it comes to Sky's traditional business of pay-TV, it is clear that somewhere between 40% and 50% of all UK homes will end up taking its service. Its current base of 10.2m TV customers is quite enough to provide a meaningful available audience for all those US imports and sport services. But clearly, growth here is reaching its limits, and Sky is probably unwilling to slash the price it pays for football just to boost profits in the short term.
Then again, Sky doesn't have to. Its growth can come from upgrading people to HD (3.9m done so far), and from its faster-growing internet and telecoms services. In an era of household retrenchment, bundling services to take advantage of discounts is clearly of value. Telecoms customers grew by 26% in the last year to 3.2m; broadband subscribers by 24% to 3.5m. It is through these activities that Sky can rely on for its next phase of growth."

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