BSkyB (NYSE: BSY) is set to continue and expand its strategy of widening content distribution onto different platforms such as games consoles, computer operating systems and third-party devices, to counter the threat from rival, web-based TV services. CEO Jeremy Darroch told investors and analysts on a call to accompany its Q1 earnings release that the company will continue to “make our content more broadly available through whatever distribution platform is available to us”.
Asked whether he was worried by the growth of online TV providers such as Google’s YouTube and Apple’s iTunes — which both carry long-form TV content — he claimed that was more of a long-term issue and said: “The way we can amplify our content through the website [the Sky Player platform] means we’re in a pretty good place.” Customer growth means that Sky was able to post a 10 percent year-on-year revenue rise to £1.38 billion and a net profit of £128 million for the three months to 30 September.
Release (pdf) | Webcast | Slides (pdf)
— TV, broadband growth More generally, the recession is still paying off for BSkyB, which added 94,000 new customers for the three months to 30 September, an eight percent year-on-year rise that gives it a total of 9.53 million. There were 287,000 net Sky+HD additions in the quarter, three times more than in the year-ago period, which means 1.6 million HD units have been sold to date and 5.9 million Sky+ boxes in total.
Regular Sky+ box subscriptions are now tailing off and 411,000 new boxes were sold in the quarter, 10,000 less than a year ago. The company reached 2.3 million broadband customers — up from 2.2 million in the previous quarter.
— Multimedia Sky carriage: Sky has made good its long-standing promise to push its content onto other platforms: soon, users will be able to watch Sky channels on the XBox, IP Vision’s FetchTV IPTV box and new editions of Windows. But there’s still no confirmation on the timing of the forthcoming “pull” IPTV VOD service, but CFO Andrew Griffith assured investors that there would not be a problem for remote users, far away from a telephone exchange. Darroch added that Sky’s iPhone apps have now been downloaded 1.8 million times.
— Sky Songs, 3DTV: Is Sky’s newly launched music download service nice-to-have digital furniture or a genuine, bottom-line investment? “We certainly hope to make money from Sky Songs,” said Darroch. “We’ve just got going, but it’s a nice addition to our line-up… and we hope we’ll be successful with it.” Given the near-zero take-up of 3DTV in the UK, Sky’s publicising of its 3D trials primarily looks like a marketing exercise. But Darroch told investors that there will be a channel launched towards the end of 2010 that will, probably, be on a PAYG basis.
— Advertising down, wholesale up: Retail revenue is up 15 percent year on year to £1.15 billion, which is just as well, because other revenue categories aren’t growing: the company’s advertising revenue was £3 million lower at £65 million while revenue from new installations fell £15 percent to £46 million. Thanks to the return of Sky channels to Virgin Media (NSDQ: VMED) TV, Sky made £55 million in wholesale revenue, a £12 million increase year on year. The collapse of Setanta and lower Amstrad device sales contributed to “other” losses of £43 million.

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