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Sky Reach For The........Sky?

David Gilbert

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Sky Reaches For The... Sky?

In the last six months of 2010 BSkyB surpassed 10 million subscribers while growing operating profits to £520 million from £414 million in 2009 – growth of 26 percent.

Looking forward to 2011, Sky said they were cautious on the economic outlook for 2011 but were planning on launching a number of new services to add value to its existing products. Next week all customers will see the Sky Atlantic channel launch with content from HBO and AMC coming to this side of the world, including Mad Men and Treme - which comes from the same person who brought us The Wire. Later in the year, Sky Anywhere will bring Sky to mobiles and tablets. The roll out of Anywhere will be aided by BSkyB’s purchase of The Cloud which we reported on earlier this week.

Sky also announced it would be creating 1,500 new jobs around the UK in its contact centres including a new centre in Sheffield. The results also revealed that HD uptake was continuing to grow with 3.5 million customers now with a HD subscription. Sky broadband also showed growth with 24 percent of customer bundling broadband with their TV package. To reflect this growth, Sky is increasing its dividend by 11 percent year-on-year, to 8.74 pence.

Jeremy Darroch, Chief Executive, commented: “The business has delivered a half year of outstanding performance, with record product sales and strong double-digit growth in revenue, profit and cash flow. In recognition of the growing strength of the business, we are increasing the interim dividend by a further 11 percent, the seventh consecutive year of growth.”

Source: Sky

Simon

January 27, 2011, 9:52 pm

With that extra profits uncle Rupert can buy up even more of the ConDem government.

Tim Sutton

January 27, 2011, 10:19 pm

Is it possible that the word "million" might be missing from the profits in the first line? I really hope so.





Otherwise my BSY shares may be about to take a bit of a tumble.

Chris

January 27, 2011, 11:04 pm

And yet the HD package is *still* £10pm. With 3.5m HD users, you'd think they might drop the 'early adopter' attitude.

Enigma

January 27, 2011, 11:47 pm

"£520 from £414 in 2009 &#8211 growth of 26 percent" in profits.





The BSkyB subscribers and ConDems whine about the Licence fee. Fools and their money are soon parted.





Of course part of that revenue and hence profits was from advertising, product placements, and programme sponsoring which is paid by all 68 million of us when we buy any product or service.





Also, BBC pay to show their channels on BSkyB platform. Not forgetting the poaching of programmes popularised by terrestrials. Latest example being Mad Men from BBC4.





I hope ESPN can break BSkyB's grip on sport and then we will see fireworks.

simonm

January 28, 2011, 1:04 am

@Enigma - But why should the licence fee be sacrosanct? That's some money this fool would like to hang on to.





If I decide I want to pay Sky £20/month for their sports channels that's my value judgement (I don't, as it happens).





But unlike other broadcasters the BBC enjoys this extraordinary element of compulsion, where I pay the salaries and expenses of these odious celebrities and BBC managers whether I want any part of it or not.





And each year the DG writes an annual report telling me what good value I'm getting. Not that I have any choice if I want to own a TV at all.





Doesn't that seem a strange way of doing things to you?





And, no, I don't think it's the same as us all paying for Sky through advertising costs embedded in the products we buy. That certainly isn't a direct cost to me. But you've not convinced me it's a genuine indirect cost to me either. In as much as there is a cost to advertising, there is a benefit, which is presumably supposed to exceed the cost, otherwise what's the point? And if the result of the exercise is a net benefit then it's meaningless to imply the cost is passed on to the consumer as if the cost can be considered in isolation. I think your economics is lopsided!

Enigma

January 28, 2011, 6:01 am

@simonm - I have already explained many times that just as you feel you don't have choice in paying the Licence fee I don't have choice in paying for BSKyB, ITV and Channel-5 because I pay every time I buy a product or Service.





Further, I don't see you and other whiners about the Government's expensive drawn-out digital switch-over when over 92% of homes have digital tv; paying for rolling out broadband in rural area for the middle and upper middle classes and paying for new local tv news channel.





We live in democracy and if I have to put up with other peoples value(less) judgement to elect this bunch of idiots in Government then well you and your favourite 'charity' BSkyB can put up with my "value judgement"!!!

Enigma

January 28, 2011, 6:12 am

Of course it's direct cost. It added to the price of the product. What you fail to say it's not transparent.





"In as much as there is a cost to advertising, there is a benefit, which is presumably supposed to exceed the cost, otherwise what's the point?"





The benefit is to the buggers who make the profits NOT to me! Whose profit's increase when products are advertised?





If anyone's economics and understanding of business are screwy it's yours.

ronesh amin

January 28, 2011, 6:58 am

Does this mean my Sky subscription goes up again with Sky Anywhere?? I already pay £114 to them each month (Sky World HD + 3D, Multiroom, Sky BB Unlimited and Sky Talk Unlimited). It hurts everytime that amount leaves my account. I'm suprised their profits only have risen by 26% if mugs like me give them so much!!

ruthless

January 28, 2011, 3:30 pm

£114 per month - jeez louise.

simonm

January 28, 2011, 4:50 pm

@Enigma





Your embedded-cost-of-advertising argument is obviously not equivalent to me paying a licence fee!





By tracing money flows you can link just about anything to just about anything. Hell, I can - with an amused nod to Godwin's law - get from the milk in my tea to financing Josef Mengele in three steps. I spit out my tea in horror.





But disregarding for a moment that indirect money flow is a practically non-existent basis for an argument, I don't accept your position that the cost of advertising necessarily increases the price you pay. (Indeed it isn't true.)





Dead simple this: I sell beer. my_profit = units_sold * price - my_costs. If I advertise I increase my_costs, but I hope to increase units_sold. The advertising works for me whether I modify the price or not: its benefits must outweigh its costs (I hope). I certainly can modify the price, but if I've improved overall profitability, that is financially equivalent in terms of the formulation above to reducing my costs... I could even reduce the price! In practice I will tend to set the price according to what the market will bear.





And you have a very twisted image of rural broadband rollout. I live in the West Highlands, which is rural and low income. Improving broadband here might even be more of a social good than bankrolling Strictly Come Dancing, although obviously it's a close call.





Finally, do you really think your name-calling strengthens your argument?





According to the BBC's own polling, only 31% of the population support retaining the license fee, the remainder favouring subscription or advertising.





http://news.bbc.co.uk/1/hi/ent...





That's a lot of crypto-fascists and Murdoch shills out there. With 69% of the population in favour of abolishing the licence fee I guess the BBC should be grateful that democracy only goes so far. :)





The BBC was a revered institution when I was growing up. How did it burn through all that goodwill? I think this is rather sad, don't you?

Enigma

January 30, 2011, 12:40 am

@simonm





The point is I don't have a choice but pay through advertising/marketing costs for sky which are factored into the cost of all products and services.





"I can - with an amused nod to Godwin's law - get from the milk in my tea to financing Josef Mengele in three steps."





Oh, please do tell me how that is possible? I am having serious problems with my concious now. I had just barely reconciled my concious for contributing to the Murdos' profiteering.





As for you citing a 2004 poll results is as ridiculous as the Tories citing the poll results of 1979 and makes your argument invalid. You're just clutching at straws.





I wonder what the poll results would be like if the respondents were fully informed of what they would have to pay for having similar quality and choice on BSkyB? Also, for having to pay for extra tv sets as @ronesh amin, etc, etc!!!





"The BBC was a revered institution when I was growing up." - Obviously the BBC did a very good job providing excellent programming for children but when you grew up: Whoops, that money bags uncle Rupert had pinched all the sports, movies etc from the BBC and ITV. So you went off to see uncle Rupert to see if he would let you watch your favourite sports. Thus uncle Rupert said to you, "Now me lad, you see in pinching the sports rights I paid a lot more than was needed or fair, also I need to pay share dividends to the share holders, and of course I want my cut. So of course you can watch sports but the thing is you'll have to pay for it and a lot more than your Mummy and Daddy did once upon time. By the way I have special offer for movie channels and then there is the HD package and....."





So off went simple Simon to work to pay for his BSkyB subscription. When he sat down to watch his BSkyB tv he found he had to watch ads too, of course he pays for them too when he buys goods and services, and it all was so unlike BBC which was just for £145.50 a year.

chrismbroome

January 30, 2011, 1:12 am

Sky in my mind used to be bad in customer service,why? because most of the people you talk to are sales men and all they care about is profit if you try to cancel or drop a package they go all why,why,why.





Another problem is if you have a problem they will make it hard for you to sort it out that problem. Recently I found a way to replace my hard disk in the SKY HD box all by my self, and no help from sky because if you ask they only say buy a new one (£200 please).





As they say business is business and they are doing well simply because money is important and they have killed off anybody who dares to try and compare with them.

Enigma

January 30, 2011, 3:18 am

"And you have a very twisted image of rural broadband rollout. I live in the West Highlands, which is rural and low income. Improving broadband here might even be more of a social good than bankrolling Strictly Come Dancing, although obviously it's a close call."





I completely forgot about this. "twisted"!!!! - given what you said about the tv Licence fee, that's rich coming from you.

timple

January 31, 2011, 10:20 pm

just goes to show the BBC offers incredible value for money when you compare with a sky subscription. And you don't have to watch ads or product placements.





why does the BBC have to pay sky to carry the BBC channels? Its a free country and my fellow citizens are free to spend on whatever but I do resent a portion of my license fee going to old moneybags murdoch....

simonm

February 1, 2011, 4:27 pm

@timple





The BBC doesn't {in their own words} pay for carriage, but it does pay a charge - regulated by Ofcom - to cover Sky's costs for providing "Technical Platform Services".





This is described by the BBC here:





http://downloads.bbc.co.uk/foi...





... and Ofcom here (paragraph 1.7 is the key one if you don't want to read the whole 78 pages!):





http://stakeholders.ofcom.org....





The BBC pays many private companies for technical services, but if you feel this charge is unfair write to Ofcom (seriously) as this charge is specifically within their remit.





It is unlikely, however, that Sky could be made to offer preferential treatment to the BBC as this would be considered anti-competitive in regard to other broadcasters operating on a commercial footing (some of whom, like Channel 4, also have public service commitments).





And Sky won't in the near future drop the charges in as much as they are fair recovery of costs incurred, which Ofcom currently accepts and on which basis the BBC/ITV joint venture Freesat also charges broadcasters for the provision of these services.





Can you see a way forward on this one?

Enigma

February 3, 2011, 5:41 pm

Another nail in the coffin of the greedy profiteering merchants as a Pub Landlady wins an EU ruling, that Broadcasters cannot stop customers using cheaper foreign satellite TV equipment to watch Premier League football, by advocate Juliane Kokott of the European Court of Justice saying the block breached EU laws.





More from BBC @ http://www.bbc.co.uk/news/busi...





The same also applies to movies etc.





Now how about Mobile telephone charges? - not just roaming charges!!! And what of...oh the flood gates of single EU market have opened up. Now, where are those UKIP lot whining about the EU who know everything about xenophobia and nothing of economics.





Just goes to prove how useless OFCOM is that subscription broadcasters have been getting away with ripping us off for so long.





Hey, @simonm why don't you get uncle Rupert Murdo' or BT to roll out fiber broadband to you. Or you could CHOOSE to move where it is provided rather than expect me and other tv licence fee payers to subsidise you rural lot. After all you have a choice!!!!!

Enigma

February 3, 2011, 7:29 pm

I first heard of the EU Ruling on the use of cheaper foreign sat. dishes in the UK on BBC News 24.





So I turned to Sky News and after 2 hours no mention of this story.





So I went to the Sky News website. Nothing again. So I did a search under pub landlady's name "Karen Murphy" and it returned a story last reported on it on 29 Nov. 2007. So I did a search "Juliane Kokott of the European Court of Justice" - nuffin again!





Now you might say TR hasn't reported it either. Well, given firstly, Sky News is a 24-hour news channel and, 2ndly, how it affects BSkyB I thought it would have reported something. After all it gave a good coverage to public bus services in rural areas being cut, including a live debate with a Minister and a passengers group's spokesperson!!!!





Things to expect from a BSkyB WHOLLY owned by the Murdoc 'evil' empire. Funnily enough News Corp owned 20th Century Fox (ref Fox News and tv in USA) make Star Wars!!!





Here's hoping that the Murdoch, Sith Lord's Dark Force does not spread to the UK.

Enigma

February 10, 2011, 3:42 am

Data from the links provided above by @simonm:





Financial Year......................BSkyB..................Freesat


2008/09.............................£8.88m.................£1.03m


2009/10.............................£9.86m.................£1.00m


2010/11.............................£9.80m*................£1.03m*





''* - the sum for 2010/11 is based on the current forecast of expenditure for this year''





NOTE: the near 10X Freesat cost!!!! Is this EXCESSIVE profiteering or poor cost control by BSkyB?

simonm

February 11, 2011, 2:10 am

@Enigma





Or does it make the cost per subscriber between the two platforms almost exactly the same?





Now I don't think that subscriber count should directly bear on the cost of platform management, which is what Ofcom is supposed to be considering. But I can see some cost advantages that Freesat has over Sky by pushing the development and maintenance of the client side on to the manufacturers. And I think it's probably fair to argue (having used both) that there is more depth and complexity to the platform defined by the Sky box than there is to a typical Freesat offering.





But here's the thing: the cost per subscriber *is* what matters to a content provider. Their consideration is reaching the greatest number of homes in order to maximize audience share.





For what it's worth, I'm no particular fan of Murdoch, but these things are always more nuanced than they seem.





Sky may be a dominant money-making machine now, but it was a huge gamble when it started 22 years ago. Murdoch racked up losses the like of which no one had seen before (£759mn annual loss in 1991 in the UK domestic market, and back then that was real money... indeed it was a jaw-dropping amount for a new entrant which was certainly not guaranteed to succeed). And then Sky went back into the red spectacularly 10 years later when converting to digital, making large losses 4 years in a row (£1.3bn in 2002 alone).





If Sky is now showing a healthy profit then in context that sounds a reasonable return for backing a risky play and having sufficient conviction to cover its sometimes huge losses over the first 15 years?





As regards your previous comment about the answer to crap services in a low income rural area being to move out: I can, but this isn't about me. From your earlier post you're clearly burning up about some of the BBC's money for rural broadband rollout benefiting rich retirees in the home counties. Okay, I get it. But that is not the totality of rural life. There are 1 million households in rural England with incomes below the poverty line <http://news.bbc.co.uk/1/hi/uk/.... Moving out is scarcely a realistic option for everybody... even when it is you've created economic migrants and a 'cleared' area instead of trying to invigorate an area. Broadband is hardly a panacea, but it does come with a whole pile of benefits. Even online shopping is a godsend when you live in the middle of nowhere. More importantly broadband brings enormous scope for personal development, distance learning, etc., and it's reasonable to expect increasing numbers of people working remotely which will help with the scarcity of good jobs in these areas. Speaking from experience, I'm moderately passionate about this, but for a contrary opinion I certainly value your uninformed bile at the potential for incidentally benefitting the well-heeled (the same might be said of the NHS). ;)

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