Sky Profits From HD Channels, Plans More

On the eve of announcing details of two more HD channels, Sky TV today reported nearly 280,000 HD decoders had been rented to subscribers.

That’s 10.6% more than the previous year and should signal enough interest in HD content for Sky to reconsider making its free-to-air channel, Prime, 1080i (particularly on the back of its rising ad revenue).

In the meantime, it will add two more HD channels after the Rugby World Cup: one will be an HD version of an existing service, most likely Discovery, and the other will be programmed in-house.

As already speculated on this site, it could be an HBO-style  mix of quality drama and comedy, along the lines of BSkyB’s Sky Atlantic and Foxtel’s Showcase.

It’s known Sky has been acquiring cable titles like The Killing, Treme and Game of Thrones, so hopefully they’ll rotate on a dedicated channel rather than be spread across Sky’s movie and entertainment channels.

Sky’s expected to confirm its plans next week.

Meanwhile, Sky’s profit of $120.3 million was $3.6 million below one analyst’s forecast but was 16.8% up on last year’s.

Operating costs were up 5.9%, to $475.2 million, partly due to the additional content costs of launching of new channels, depreciation of outside broadcast assets, and higher advertising and subscriber management costs.

Total revenue was up 7.4%, to $796.9 million, after a 3.4% jump in new subscribers: the 27,024 newcomers boosted subscribers to a record 829,421.

The total number of MY SKY HDi decoders was 279,875 as of 30 June 2011 — 10.6% more than the previous year — while more than 35% of subscribers have a MY SKY decoder.

Ironically, however, Sky’s been caught short with more Rugby World Cup demand for its MY SKY HDi and MY SKY+ than anticipated, and is having to fly in extra units, although many of these won’t be in subscribers’ hands until after kick-off.