Sky TV New Zealand boosted by MySky HDi

Website: Rapid TV News

Sky TV New Zealand has said that the success of its high-definition PVR product, MySky HDi, is responsible for an improved set of financial results which saw revenues up 6.6%, EBITDA up 10.7% and earnings up 19.1%.

A statement from John Fellet, Sky NZ’s chief executive, accompanying the company’s six-month earnings (to end-December 2009) said that research suggested “that subscribers are enamoured with this product and believe it represents great value for money.”

Fellet continued: “As we explained in last year’s interim and annual reports there were real costs to Sky of launching this new product. Not only did we have to completely rebuild our television station to enable the broadcast of HD television, we also had to upgrade our outside broadcast vans and expand all of our national and international fibre links to enable transmission of high definition video signals. We also needed to lease another transponder on the Optus satellite to broadcast Sky’s four HD channels plus the three free-to-air channels that have been available in HD on Sky’s satellite platform since July 2009.

“While these costs are significant they are all fixed costs and need to be paid regardless of how many MySky HDi subscribers there are. Hence last year’s results were adversely impacted by the launch of this product as all of these costs were being incurred while the subscriber base was only beginning to grow.”

By the end of 2009, Sky NZ had signed up 144,148 MySky HDi subs, more than double the 70,384 at the end of 2008 and up substantially on the 103,991 at the end of June 2009. There is also much room for further growth, with MySky HDi subs just 18.8% of the total subscriber base.

Sky’s average revenue per user (ARPU) is also benefiting, up 6.1% to NZ$67.35 from NZ$63.49. MySky subscriber ARPU increased from NZ$75.19 in the previous six-month period to NZ$83.89. And churn is lower – 10.7% for the period for MySky subs, compared with 14.4% for subscribers on the standard digital decoder.

But the company admitted all is not rosy, with “relatively low” net subscriber growth for the period. Subscribers rose just 5,976 during the six months, compared to 10,493 for the last six months of 2008.

The company said: “November and December have been challenging months for Sky, and while churn is down compared to the previous year we have been struggling to generate new sales over these summer months. This has continued into January. So while many of our existing subscribers have been happy to commit to paying more for the services offered by MySky HDi during these difficult economic times, it has been difficult to attract non-subscribers during these summer months. We expect interest will return with the commencement of some of our winter sports in February and March.”

Revenues rose from NZ$346.3 million in the six months to end-Dec 2008 to NZ$369.1 million for the six months to end-Dec 2009. Expenses went up from NZ$261.9 million to NZ$279.2 million. Operating profit was NZ$89.9 million (NZ$84.4 million), pre-tax profit NZ$72.8 million (NZ$60.7 million) and profit NZ$50.8 million (NZ$42.6 million).