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Sky profit up 21%

Sky’s profit was $165.8 million in the year to end June. The number of overall subscribers has plateaued so that profit growth comes from lower costs and higher subscriber spend.

In the game of numbers, Sky claimed a selection of positives in its annual reporting: an increase in number of overall subscribers (to 865,055), an increase in number of subscribers taking the more expensive MySky option (now 61% of all subscribers), an increase in per subscriber spend (up 2.2% to $77.52/month), and a $10 million decrease in operating expenses, mostly from lower programming costs.

Some commentators argued the picture isn’t quite as rosy as it’s being painted. Although the profit was larger than the expected $160 million, subscriber growth hasn’t kept pace with population growth so – measured by percentage of population – there are fewer Sky subscribers than there were a year ago.

Sky also faces increased costs and competition as it moves forward. Programming costs fell this year in large part because of one-off costs last year around the Olympics. The company has also committed to a $100 million spend over three years to change all its boxes for VOD-capable ones as it faces more competition from VOD services.

Telecom’s $15/month service Lightbox launches next week, while Sky plans to introduce its own VOD service later in the year.