Hot Off the Press Release: Sky TV Half-Year Results

Departing Sky chief executive John Fellett signed off his last results announcement with a net profit of $53.6 million and a market peneration rate of 43% (or 750,321 customers).

The satcaster also announced subscription changes and said trailing of its its next-generation Sky services were continuing.

Here’s the press release:

Releasing his final Interim Results as Chif Executive Officer, John Fellet said, “The Half Year results are pleasing given the competitive and evolving market Sky is operating in.

“We are proud to serve more than 750,000 customers, and our market penetration of 43% is solid by global standards.

“We are focused on delivering great sport, premium drama, movies and entertainment to all of our customers, in ways that work for each of them.

“In the last six months we have enhanced our streaming service Sky Go with hundreds of hours of On Demand content, and introduced ’download to go’ capability.

“We continue to encourage all Sky customers with fast home broadband to connect their Sky boxes to the internet, giving them access to hundreds of hours of content On Demand.

“Consistent with our strategy to ensure we can reliably serve 100% of New Zealand customers, we have also entered into an agreement with Optus to extend access to satellite services through to 2031.

“Sky’s new internet-based ‘next generation’ platform will further enhance the viewing experience.  It’s On Demand-centric and offers an image-rich menu that makes it simple to find the best content to watch (both Sky content and a range of apps).

“The development programme is a core priority for the business.  We have set a very high bar for the customer experience it must deliver, and the platform is not yet meeting that standard.

“We are working closely with global provider Synamedia to ensure that we deliver an experience that meets our expectations – and importantly, those of our customers.  More information on the delivery timetable will be announced at the conclusion of current user trials.”

Mr Fellet reported that total revenue for the six months is $403 million, with net profit of $53.6 million and average monthly revenue per customer of $75.82.

“While customer numbers are lower than in previous years, a move away from the aggressive discounting of 2016-17 has improved the quality of new customer accounts and stabilised churn.

“Competition for content rights continues to heat up, and SKY’s programming expenses now equate to 40.1% of revenue, compared to 37.9% of revenue for the previous period, and 32% in 2016.

“While we have traditionally implemented a price increase each year, broadly in line with CPI movements, for the last three years we have held prices (and last year we made changes to our packages to drop the entry price for Sky).

“This April we will make a small increase to prices of three tiers, but with a special enhancement for all customers.  There will be an increase on the Starter, Entertainment and Sport tiers, and we are removing the High Definition (HD) fee for all customers.

“The overall impact is an average increase of 1.9% for customers, bearing in mind that some customers who currently pay $9.99 for the HD ticket will actually get a decrease   It is worth noting that CPI has increased by 4.2% since we last increased prices.

“We will also extend the number of channels with HD.  More than 20 channels are already offered in HD, and this will be increased to over 30 in the next few months.

“The HD viewing experience is significantly better than standard definition, and we expect customers to welcome the enhanced experience when we offer it to everyone from 1 April.”

Noting that this was his last day as Chief Executive, Mr Fellet said: “I’m a TV content man, through and through.  I sign off my final Results announcement with a reminder of the superb line-up of content that Sky delivers to our customers every day.”