Sky profits surge as more viewers subscribe
Broadcaster has been investing in scripted entertainment to compete with Netflix and Amazon.com
Sky, the European pay-TV company Rupert Murdoch’s 21st Century Fox is trying to buy, said first-half profits rose as more customers signed up, leading to record viewing of original productions such as Babylon Berlin.
Revenue, on a like-for-like basis, increased 5 per cent to £6.7 billion (Dh35.08bn), while earnings before interest, taxes, depreciation and amortisation rose 10 per cent to £1.1bn, the London-based company said on Thursday. Sky added 365,000 new customers and reduced the rate at which subscribers leave the business.
“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, as more customers continue to choose Sky for more of their services,” Sky chief executive Jeremy Darroch said.
Sky is waiting for the green light from regulators and politicians to be acquired by Fox, which in turn plans to sell the company to Walt Disney. The UK’s Competition and Markets Authority said this week that the £11.7bn Fox-Sky deal could only go ahead subject to concessions around Sky News, given concerns about Murdoch gaining too much influence over British media.
Facing the prospect of rising costs to broadcast sports like Premier League football, Sky has been investing in scripted entertainment to compete with Netflix and Amazon.com , with shows like Babylon Berlin, a 1920s crime saga.
Churn, the 12-month rolling rate at which customers leave the business, was 11.2 per cent in the UK and Ireland, Sky’s biggest market, down from 11.6 per cent a year earlier.
Sky’s stock has climbed 14 per cent since mid-November to 1,023.50 pence, as investors have taken comfort from Disney’s interest in the broadcaster.
Updated: January 25, 2018 01:54 PM