BSkyB has shrugged off the economic gloom by grabbing 171,000 new customers over Christmas and announcing plans to recruit 1,000 engineers and call centre staff as it launches a major push to get people to sign up for high definition TV.
The satellite broadcaster reckons more than 7m households already have TV sets that can receive HD programming - and this is set to double by the end of the decade. Announcing a 26% increase in first-half profits, Sky said it was looking to grow its HD customers from the 779,000 it had at the end of last year. As a result, today it is slashing the cost of a Sky+ HD box by two-thirds to £49.
To back up its drive for HD viewers, Sky is recruiting 1,000 more staff and opening a call centre in Leeds. The company, which employs about 15,000 workers, said it needed about 600 new engineers and 400 call centre staff to meet anticipated demand for HD services. Recruiting the staff, which has already begun, will add about £30m a year to Sky's cost base.
In the three months to the end of December, Sky gained 188,000 new HD customers – including existing subsribers who have upgraded – double the rate of first-quarter additions and five times the rate seen in the fourth quarter of last year. The broadcaster now offers access to 31 HD channels, more than any other broadcaster, but just 8% of its total customers base are taking the service. It refused, however, to set a target for how many HD customers it wants by the end of the decade.
Overall Sky added 171,000 new customers in the three months to end December – its second financial quarter – compared with 167,000 in the same period in 2007 as cash-strapped consumers opted to stay at home and watch TV rather than go out to the cinema or a restaurant. In fact, over the past year average TV viewing per individual in the UK increased by 3% to 3.7 hours per day.
City analysts had forecast Sky would add between 95,000 and 167,000 new customers in the quarter. Sky now has 9.24 million customers with 13% taking all three of its services – TV, broadband and home phone.
And this from Virgin Media's chief technology officer Howard Watson, April last year:
Watson said the popularity of HD in the US - where significantly more content and channels are generally available - was driven by the country's NTSC analogue television system. It is generally accepted that it gives a worse picture than PAL, the alternative employed in the UK.
"We don’t have the ‘Never The Same Colour’ challenge that has driven HD offering in the US," said Watson, according to Broadband TV News. "We have 7m HD ready sets in the UK and I still think HD works really well for certain bits of content but is disappointing for others.
"I don’t think we’re losing customers because we don’t have the HD lineup that Sky has. It’s not causing us a churn problem - all of our HD customers [have] PVRs - so it's difficult to separate them, but a part of that is HD."
Doesn't really merit comment, does it?