BSkyB bucks TV's downward trend

Pay TV company goes back into the black

By ED MEZA

BERLIN — Bucking the trend and continuing to attract subscribers, Blighty satcaster BSkyB was back in the black with an 8% rise in revenue and a £287 million ($424.4 million) boost in net profit for the nine months to March 31.

The U.K.'s biggest pay TV provider said it added 80,000 customers in the last quarter, with BSkyB products now reaching 9.3 million households.

BSkyB's $250 million net profit follows a year-earlier loss of $175 million, which was affected by an impairment of some $700 million relating to the company's investment in ITV. The group's operating profit rose 23% to $917.2 million.

The third-quarter boost was attributed in part to the popularity of its high-definition offer. "The combination of the long-term trend toward high definition and the launch of our new HD box strategy generated a huge response from customers," said Sky CEO Jeremy Darroch.

Despite the strong showing, Darroch said he expected conditions to remain challenging in 2009, adding that "we will stay focused on cost efficiency to allow us to invest sensibly in areas that drive long-term value for the business, such as high definition, with the objective of emerging stronger from the downturn."

BSkyB saw ad revenue drop 6% to $345 million, reflecting the weak advertising environment. Yet the company said it continued to outperform the rest of the market, pointing to internal estimates indicating the overall TV advertising sector was 12% lower than in the previous period.

The higher-than-expected subscriber numbers and overall positive results lifted BSkyB shares more than 6% on Thursday before settling at $7.07.