New TV services lift Sky’s profits as rivals circle

AN IMPRESSIVE showing from BSkyB’s new on-demand internet streaming service, Now TV, helped it to a 10 per cent rise in profits, the broadcaster said yesterday.

Sky said that half of the 50,000 new TV customers it signed up during the last six months of 2012 were for Now TV, which charges customers £15 a month for on-demand access to Sky’s movie catalogue on internet-connected devices such as PCs and tablets.

The company also managed to move more customers onto lucrative “triple-play” plans, in which they buy broadband and landline telephone subscriptions as well as TV services. The average Sky customer now pays £568 per year.

The lower costs associated with triple-play contracts meant Sky saw a 10 per cent rise in half-year profits to £487m, even as revenues rose at a slower rate to hit £3.5bn.

Sky also announced yesterday it would show its live sports channels on Now TV, a move that is expected to drive adoption of the platform and expand Sky’s appeal to those who do not want to pay the minimum £42.50 a month a Sky Sports TV package costs. However, at £9.99 for 24 hours’ viewing, regular use of the service will be pricey.

Sky has launched Now TV and improved its internet-based services this year in a bid to fend off increasing competition from the likes of Netflix and Lovefilm as more people watch content on smartphones and tablets. Bringing sports to Now TV will also defend Sky against BT, which will start its own sports programming from the summer, discounting it for BT customers.