Sky Media outperformed the TV ad sector in Q3 as its parent BSkyB, the pay-TV group, continued to defy the downturn by signing up 94,000 new satellite TV subscribers.
Unveiling its results for the three months to 30 September, BSkyB said its ad revenue fell 4% year on year, to £65m, compared to an estimated overall decline of 13% in the TV ad sector in Q3.
Ad revenue is, however, not the driver of BSkyB's growth. Ad revenue accounted for 4.7% of BSkyB's £1.38bn total revenue in Q3, with the vast majority (£1.12bn) coming from its core residential satellite pay-TV business. Its ISP business, Easynet, generated £50m in revenue in the period.
BSkyB signed up 94,000 new subscribers in Q3 to end the period with 9.5 million pay-TV customers, taking it closer to meeting chairman James Murdoch's target of 10 million customers by the end of 2010.
Its HD and Sky+ products continue to perform strongly, with 287,000 and 411,000 new customers taking the products respectively. It ended Q3 with 1.6 million HD subscribers and 5.9 million Sky+ subscribers.
Average annual revenue per user also increased from Q3 2008, from £430 to £469. However, its churn rate, which refers to the proportion of subscribers who cancelled their service but who were then replaced by new subscribers, was up to 11.3% from 10.9% a year earlier.
Pre-tax profit was £198m, up from £182m a year earlier. Profit was dampened in Q3 2008 by a £24m so-called impairment charge - which revalues an asset - in relation to its almost 18% stake in ITV.
The company did not break out significant detail regards its relationship with ESPN, whereby it retails the latter's sports channels to its subscriber base.
However, it noted that a £33m rise in programming costs was due in part to payments to ESPN under their agreement.
Also, it disclosed that its subscriber management costs increased by £7m on the back of the launch of ESPN and ESPN HD to Sky customers.
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