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BSkyB Chases Its Tail

by User Not Found | Jan 31, 2007

Sky's latest digital TV results demonstrate perfectly how it is fighting two battles at the same time. Churn continues to rise - now up to 11.9%, compared to below 10% not long ago - and the company is having to add more and more customers just to stand still, the inevitable consequence of any maturing market. Gross additions were excellent - 432,000 - but net was only 183k, lower than City forecasts.

So Sky has to keep finding more and more new customers to keep growing, and the law of averages says that can't go on for ever. But certainly, with some 17 million UK households not currently taking Sky's pay digital TV services, the company will feel it has plenty more room for growth. It will display confidence externally that it can take on and beat the growing number of competitors, although I suspect internally Sky is acknowledging the real threat of competing platforms, led by Freeview and now joined by BT and other broadband providers.

I suspect we will see the company push customer lock-in technologies like Sky+ even more aggressively this year to try to stem that rising churn rate. For all its faults (see previous blogs) Sky+ is something that is very hard to let go of once you've had it.

BTW, if any reader knows the ins and outs of Blogger's global sites, could they let me know how to find the English language site when I'm travelling abroad, as I always seem to get the local version. Currently in Japan, it is largely through guess work that I've managed to post this blog at all....
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