Slowdown in new BSkyB subscribers causes share price to tumble by 14%

SATELLITE broadcaster BSkyB suffered a slowdown in adding new Irish customers to its digital service in the first six months of the year, according to figures released yesterday.

The company, which announced pre-tax profits of stg£480 million (€720 million) for the year to June, signed up 8,000 new digital customers here since January, bringing its Irish total to 323,000.

But this compared with 14,000 additions in the same period in 2003. The company’s cable subscribers fell to 574,000, 5% lower than a year ago.

Sky Ireland director Mark Deering said the digital service was enjoying continued success and confirmed the “growing appeal” of digital television in Ireland. Mr Deering said almost one in four Irish households subscribed to Sky Digital and that Sky channels were available in two-thirds of homes. The second half of the year is seen as more important for signing up digital customers, partly because it includes the start of the soccer season in England and on the continent.

“Sky is firmly committed to continuing our investment in Ireland and we look forward to further growing our business here in the future,” said Mr Deering.

Sky first launched its digital service in Ireland in 1998 and set up a dedicated Irish news service in May with two half-hour bulletins, fronted by former TG4 and TV3 news anchor Gráinne Seoige, on weeknights. The bulletins are believed to have boosted the average Irish viewing figures for Sky News from 10,000 to 15,000.

Sky generated approximately €19 million in revenue in Ireland last year by selling Irish-specific advertising on Sky News, Sky One and two of its sports channels. But advertising accounts for less than 10% of total revenue, with the bulk coming from subscription fees.

But the markets reacted badly to BSkyB’s results and the share price tumbled by almost 14%. Analysts blamed news that the company would need to ramp up its advertising and marketing spend to attract new subscribers in Britain and Ireland, a move which they felt would hurt profits.