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BSkyB TV subs face drop for first time in more than a decade

30 Apr 2014  |  Ellen Hammett 
BSkyB TV subs face drop for first time in more than a decade

BSkyB TV subscriber numbers face a fall for the first time in more than a decade, the Financial Times has reported.

According to predictions by analysts at Credit Suisse and Berenberg, BSkyB lost approximately 5,000 TV subs between December 2013 and March 2014 - the first quarterly fall since 1999.

Omar Sheikh, analyst at Credit Sussie, told the Financial Times: "The volumes on the TV side have ground to a halt. The key thing is it impacts margins more than revenues. The [earnings before interest taxes, depreciation and amortisation] margin on a TV customer is much higher [than on a broadband customer]."

Sky continues to face fierce competition from rival BT - particularly in sport - with Sky seeing a 10% fall in shares after BT exclusively secured the Champions League and Europa League rights in a deal worth almost £1 billion. The deal resulted in Sky's stock market value dropping by almost £1.4 billion.

The broadcaster also has to contend with newer businesses shaking up the market, with UK Netflix membership up from 10% to 14% in the last six months, according to Decipher's latest MediaBug report. Enders Analysis estimates the figure to be approximately 2.2 million.

Netflix currently charges £5.99 a month to access all of its content - significantly cheaper than Sky, which charges up to £43.50 a month for content, not including broadband.

Decipher's research also puts Netflix at the forefront of the online subscription VOD market; however Sky's Now TV service has showed steady growth to claim 3% of online consumers, which director of Decipher Media Research, Dr. Hamish McPharlin, says emphasises the battle for dominance in the video on-demand space.

"Whilst Netflix is ahead in the online arena, and Sky leads on the TV, the volume of new entrants ends up pulling audiences in all directions," he said.

"The intensity will have to abate at some stage, and in the end, it is the vendors that can provide."

BSkyB are set to report on the results on Thursday.

This article was updated at 10:30am on Wednesday 30 April. The original headline and opening line did not reflect that BSkyB have not yet issued the official results

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