* Adds 74,000 net new customers in Q3
* Sports rights dent nine-month operating profit
* Nine-month revenue climbs 7 pct
* Shares up 3.9 pct
(Adds reaction, background)
By Kate Holton
LONDON, May 1 British pay-TV operator BSkyB
defied increasing competition to add 74,000 net new TV
customers in its third quarter, more than twice the growth
recorded last year and well ahead of forecasts.
BSkyB, which has broadened its offering with increased
content and services after BT encroached on its
traditional stronghold of sports coverage, said it had achieved
growth in both its satellite subscription package and its
cheaper online offering.
The dominant player in the pay-TV market for the past 10
years, BSkyB launched an online offering in 2012 to reach those
consumers who were unwilling to sign up to a 12-month package.
That move had sparked fears that the cheaper alternative
would erode traditional subscriber numbers and dent margins, but
the company said on Thursday that it was seeing good traction
for its online Now TV offering, with many customers paying as
much as those on basic TV subscriptions.
The one weak spot in the third quarter results was the
addition of 70,000 customers to its broadband service, in line
with forecasts but down from the 152,000 it signed up in the
same period a year earlier.
The solid trading performance helped the group, 39
percent-owned by Rupert Murdoch's Twenty-First Century Fox
, to report nine-month figures in line with forecasts.
Investment in sports broadcasting rights sent adjusted operating
profit down 9 percent, but revenue increased by 7 percent.
Shares in the group were up 3.8 percent by 0900 GMT.
"Overall TV additions have not only surprised positively but
have doubled from a year ago," Citi analysts said. "No doubt Now
TV does have a part to play, but we believe (the subscription
package) was also positive. We see this as a strong signal of
the health of the TV base."
The third quarter was marked by heavy promotion from Sky's
rivals, with both BT and Virgin Media pushing their
broadband offerings while Sky focused its marketing push on
boxed-set TV shows and movie content.
About five million of Sky's TV customers take an
internet-connected set-top box that enables them to download
programmes. It also allows Sky to direct more relevant
advertisements to viewers.
"We have had a strong third quarter and continued to grow at
an accelerated rate as customers respond to the quality and
breadth of our offering," Chief Executive Jeremy Darroch said.
"We're now more than three quarters of the way
through our plan for the year and are on track to deliver
returns in line with our expectations."
($1 = 0.5922 British Pounds)
(Editing by David Goodman)