skyfacts summer update 2003 On target: Sky measures its business progress by four key factors: subscriber As a business, Sky is going from strength to strength. growth, churn, average revenue per subscriber (ARPU), and subscriber At the end of March, we reported another strong set acquisition cost (SAC). of results. Operating profit almost doubled year-on-year, thanks to strong revenue growth and sustained cost control. We are on track to hit all our targets. Financial performance Over the last two years, BSkyB has steadily improved its financial position, after a period Subscriber growth: By March this year, of major investment in the late 1990s. The most recent Sky had 6.7m direct-to-home digital satellite subscribers – on track to hit the target of figures show that the company achieved an operating 7 million by year-end. profit of £254m in the first nine months of the 2002/03 financial year. This represents a 96% increase on the 6.7m corresponding period.
Churn: The rate at which subscribers give The company’s joint venture portfolio made a dramatic up their subscriptions reached an all-time recovery, turning a £74m loss into a £1m operating low of 9.3%. profit. Net debt was reduced by £211m, from £1528m to £1317m. 9.3% Multichannel TV passes milestone Multichannel
ARPU: Average revenue per subscriber rose TV has continued to increase its popularity in the UK, to £364, putting Sky on target to reach its objective of £400 by the end of 2005. with viewing share across all UK TV homes up 7% for the nine months to 31 March 2003. During Easter week 2003, multichannel viewing passed a milestone when, for the first time ever, its share of the UK viewing £364 audience exceeded both BBC1 and ITV1: multichannel SAC: Average subscriber acquisition cost recorded a 26% share against ITV1/BBC1’s 24%. was £210, representing a £25 reduction on the comparable period of 2002. This success was maintained into the following week, a clear indication of the appeal that multichannel viewing is continuing to exert across the UK and £210 Ireland.
Multichannel TV During Easter week 2003, multichannel viewing passed a milestone when, for the first time ever, its share of the UK viewing audience exceeded both BBC1 and ITV1. Operating profit: £254m in the first nine months of the 2002/03 financial year, a Betting coup Sky’s successful sports betting business 96% increase on the corresponding period. has been reinforced by the launch of SkyBet Vegas, which brings classic casino games into the living room with the opportunity to win £250,000. As a result, 96% interactive TV betting generated three times the volume of bets than in the comparable period of 2002. The best in sport Quality live sport attracts new Acting responsibly: At Sky, we are subscribers and retains existing customers. Sky Sports committed to observing and practising the principles of good corporate citizenship. continues to acquire key sports rights including, within This commitment is focused on responding to the needs of our stakeholders by pursuing the last twelve months, UEFA Champions League initiatives aimed at building mutual trust and loyalty. Progress and future plans will football and golf’s Ryder Cup. be detailed in the Corporate Responsibility Review 2003, to be published in the coming months. The future is multichannel As customers demand more choice and flexibility in their viewing, the multichannel option looks certain to represent the future of TV – and Sky is ideally placed to satisfy this rising demand. Including both cable and estimated digital terrestrial homes, at least one or more of Sky’s channels is now distributed to 12 million homes – nearly half of all TV homes in the UK and Ireland. With innovative ideas such as Sky+ and the rapid development of new interactive features, Sky is building an outstanding platform for the future. And by successfully producing its own news, entertainment, movies, music and sport channels, it is providing a TV environment that is rich in both information and sheer viewer enjoyment. That’s why more people are tuning in to Sky for their complete home entertainment needs.
Costs contained Revenues up Sky contained its costs in line with In the nine months to March 31 2002 sustained growth: programming costs total revenues rose by 15%, Direct-to- rose by only 10% and other operating Home revenues increased by 23% costs were restricted to a 6% increase. and advertising revenue rose by 15%. An all round better Special summer offers for Sky+ are set to boost viewing experience subscriptions to a service which enables customers to arrange their viewing round their life, rather than the other way round. Sky+ gives users the opportunity to record one channel while watching another, pause and rewind live TV or automatically record all episodes Sky+ of favourite programmes. Growth in subscriptions Both the Sky+ service and the Extra Digibox option 79,000 are proving to be very popular. In the first quarter of 2003, Sky+ subscriptions rose by 21% to 79,000, +21% while Extra Digiboxes went up by 17% to 137,000.
Extra Digiboxes Growth in subscriptions 137,000 +17%
Sky+ summer promotion To boost subscriptions even further, Sky is running a special Sky+ promotion linked with an offer on Extra Digiboxes. Subscribers can opt for Sky+ at a low rate and move their existing Digibox to another room to provide access to Sky elsewhere in the house. Sky Movies & Sky Box Office 1 2 Action addict or culture vulture, Sky has something for everyone this summer. Major Hollywood films making their British television premiere include Will Smith as ‘The Greatest’ in Ali and Vinnie Jones’ Hollywood lead debut in Mean Machine. Indeed, a who’s who of British talent will be appearing on Sky Movies screens in blockbusters like Harry Potter and the Philosopher’s Stone and the critically Every one a winner acclaimed Gosford Park. Sky’s summer movie line-up includes a host of Oscar winners and nominees. Will Smith was nominated as best Actor for Ali. Director Leon Gaat picked up the Best Documentary award for When We Were Kings, about the great boxer’s Rumble Sky Box Office broadcasts two of the biggest in the Jungle. The acerbic Michael Moore also won Best Documentary for his grossing films of all time – superhero blockbuster film Bowling for Columbine. British screenwriter Julian Fellowes took the Best Spider-Man and Star Wars Episode II: Attack of the Screenplay award for his country house saga Gosford Park, while actors Diane Clones, as well as Spielberg’s Minority Report and Lane and Ethan Hawke were both nominated for their roles, respectively in Unfaithful and Training Day. For more information on all these and much more Smith and Tommy Lee Jones reprising their suits besides, Sky Movies provides two comprehensive interactive services – ‘n’ shades roles in Men In Black II. Sky Movies Active and skymovies.com.
1 Gosford Park 2 Bowling for Columbine 3 Harry Potter and the Philosopher’s Stone 4 Minority Report 5 Spider-Man 6Ali 7 Men In Black II
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Music Channels
Three new wholly-owned music channels Flaunt mixes chart, urban and dance music went live in April with the launch of Flaunt, from the likes of Eminem, J-Lo, Mis-teeq Scuzz and The Amp. Each is designed to and Justin Timberlake with the latest videos, appeal to different segments of the youth celebrity gossip and mega prizes. market. All three channels offer a high degree of viewer interactivity.
Scuzz is the spiritual home for people who like their guitars loud and their thrills thick and fast.
The Amp delivers the goods to hardcore rock fans with a taste for bands like the Manic Street Preachers, The White Stripes and Radiohead. Rugby Union Sky Sports As the World Cup approaches, England’s Sky Sports offers live quality sport build-up is live on Sky Sports. Alongside the home nations on tour in the southern throughout the year. The ‘Summer of hemisphere, the Tri-Nations games give a Sport’ features live international rugby guide to the form of Australia, South Africa union, cricket, and football and two of and the All Blacks. golf’s majors. Football on Sky – domestic The new football season will be the most televised to date. The season kicks off in August with the Amsterdam Tournament and Community Shield then live matches from the Barclaycard Premiership and Nationwide eague.
International Golf Sky Sports has won new long-term deals for the US PGA and European Tours, all four World Golf Championship events, the US Open, the US PGA Championship and the Ryder Cup.
International cricket This summer Sky Sports has live coverage of every England one-day international as they face Pakistan in the NatWest Challenge and South Africa and Zimbabwe in the NatWest Series.
Twenty20 cricket on Sky Designed to attract new fans to the game, the new big-hitting limited overs tournament has been an instant success.
UEFA Champions League Starting in September, a brand new event to Sky Sports. This season viewers across the UK can see every match live from the UEFA Champions League. On Wednesday nights there will be up to 8 live games on Sky Sports and Sky digital viewers can pick their match or switch between games by using the interactive service. Sky News Sky News consolidated its position as a highly respected news-gathering organisation by winning a BAFTA in 2003 for its coverage of the Soham murders. This is the second year in succession that the channel has picked up the BAFTA for News Coverage of the Year.
The channel was also honoured by the Royal Television Society which named it News Channel of the Year for the second successive year, and nominated its coverage of the Soham murders as the News Event of the Year. Jeremy Thompson, who anchored the story live from Soham, was described as the ‘ideal reporter/presenter’ by the judges.
The news channel of choice When the big stories break, more UK viewers turn to Sky News than to any other 24-hour news channel. During the first three weeks of the Iraq conflict, Sky News consistently outrated BBC News 24 and ITV’s News Channel in multichannel homes, recording an average weekly reach of over 10.5 million individuals and an average weekly viewing share of 5.7% — more than double that of its rivals.
Who wants to be interactive? Sky One The interactive scope of Sky’s digital platform After seven series, the final episode is adding a new dimension to TV viewing, not just on Sky’s own channels, but also of Buffy The Vampire Slayer has been on mainstream programmes transmitted transmitted on Sky One, but the channel to multichannel homes. Viewers can now has a strong line-up of firm favourites to take part in top-rated shows such as I’m A replace the scourge of Sunnydale’s demons. Celebrity – Get Me Out Of Here, Who Wants To Be A Millionaire? and Big Brother, using Dinotopia is back with a new 13-episode the red button on the Sky remote to answer adventure series. The award-winning the questions or vote off a housemate. Malcolm in the Middle returns for a new series in August. The football drama Dream Team is also returning for a new UK premiere season. In addition, a host of original new commissions will be hitting the screens in Autumn including Fear Factor and Behaving Badly.
The Simpsons: the show goes on When The Simpsons first aired on Sky in 1990, the critics may have sharpened their knives – but the viewers loved it. Thirteen years later, it’s become a much-loved cultural institution and a global TV phenomenon that’s won 18 Emmy awards. In April, Sky One viewers were the first in the UK to see the landmark 300th episode of this witty, irreverent cartoon favourite.
Reality bites At home with Michael Jackson Coming soon to Sky One, Scare Tactics is a new Michael Jackson remains one of the most fly-on-the-wall prankster show hosted by former controversial and enigmatic celebrities in the Charmed star Shannen Doherty. The show puts world. Sky One scored a home run when it ordinary people into alarming situations and secured the rights to show a documentary observes their reactions as they struggle to featuring clips from the star’s own home understand what’s happening to them; in one movies, highlighting the family man behind episode, for example, a couple are led to believe the pop star image. that they are being abducted by aliens. Scare Tactics may sometimes court controversy, but it makes for gripping viewing. British Sky Broadcasting Group plc Grant Way, Isleworth, Middlesex TW7 5QD, England Telephone +44 (0)870 240 3000 Facsimile +44 (0)870 240 3060 www.sky.com
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Produced by BSkyB Corporate Communications June 2003