Sky New Zealand doubles HDi PVR subscribers in 2009

Thursday, February 18th, 2010
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SKY Network Television Limited (“SKY”) [NZX: SKT] has released its interim report for the six months to 31 December 2009.

At 31 December 2009, SKY Television had 144,148 MYSKY HDi subscribers compared to 70,384 in December 2008, an increase of 104.8%. MYSKY HDi subscribers now represent 18.8% of SKY’s satellite subscriber base. This growth during very challenging economic times is testament to the quality and value of this product. A number of subscribers have commented that “MYSKY has changed my life” and it is encouraging to see more and more of our subscribers making the switch to MYSKY with 83.1% of MYSKY subscribers having migrated from SKY’s standard digital decoder.

Another benefit of MYSKY HDi is the significant reduction in churn for subscribers with this decoder. For the rolling 12 months to 31 December 2009, MY SKY HDi gross churn was 10.7% compared to the churn rate for subscribers on the standard digital decoder during this period of 14.4%. This reduction in MYSKY churn has helped lower SKY’s overall gross churn to 13.8% from 14.8% in the comparative period.

The large increase in DBS (satellite) subscribers is partly due to our efforts to migrate the last of SKY’s UHF subscribers off this 20 year old analogue network and onto SKY’s DBS satellite network before the UHF network is decommissioned in March 2010. During the period 19,453 UHF subscribers and 11,217 UHF tandem subscribers (where a UHF decoder was being used as second outlet) were given a free digital satellite install and we have grandfathered their UHF package structure for 12 months as part of the transition offer.

Through to 25 October 2009 (week 17), SKY was tracking ahead of the previous year in terms of net subscriber growth with a net gain in subscribers of 7,048 compared to 6,895 in the previous period. However for the six months to 31 December 2009 SKY is reporting net subscriber growth of 5,976 compared to 10,493 in the comparative period. November and December have been challenging months for SKY, and while churn is down compared to the previous year we have been struggling to generate new sales over these summer months. This has continued into January. So while many of our existing subscribers have been happy to commit to paying more for the services offered by MYSKY HDi during these difficult economic times, it has been difficult to attract non-subscribers during these summer months. We expect interest will return with the commencement of some of our winter sports in February and March.

Total UHF, DBS and other subscribers:

                           31 Dec 2009  30 Jun 2009  31 Dec 2008
                           -----------  -----------  -----------
Subscribers - UHF
  Residential                    3,078       22,772       26,835
  Commercial                       131          400          459
    Total UHF                    3,209       23,172       27,294

Subscribers - Satellite
  Residential                  650,721      623,564      598,459
  Residential - wholesale      107,823      111,260      115,441
  Commercial                     8,264        8,167        8,031
    Total DBS                  766,808      742,991      721,931

Subscribers - Other             14,861       12,739        9,844

Total subscribers              784,878      778,902      759,069

MYSKY subscribers              144,148      103,991       70,384

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