Sky+ PVR reaches 5.5 million customers

British Sky Broadcasting Group Plc (BSkyB) results for the twelve months ended 30 June 2009

In the quarter to 30 June 2009 (“the quarter”), BSkyB (LSE:BSY) saw strong customer growth as consumers responded to the quality and value of Sky’s services.

Net customer additions for the quarter were 124,000, 35% higher than the prior year, taking our total base to 9.442 million. Within this, gross customer additions were 15% higher year on year at 356,000 and annualised churn for the fourth quarter was 9.9%, broadly level on the prior year; a strong performance in a challenging environment.

At the same time, Sky have also deepened their relationship in the home, with customers taking more products than ever before. Sky achieved record gross product sales in the year, reflecting an increased appetite for bundled services. This resulted in a year on year increase in ARPU of £37 to £464.

Sky+ and High Definition Opportunity

Customers have responded in record numbers to Sky’s high quality and great value HD service. In the fourth quarter Sky added 291,000 Sky+HD customers to reach over 1.3 million. Penetration of Sky+HD now stands at 14%, versus 6% in the prior year, and Sky has more than doubled the number of HD customers, adding 815,000 in the last twelve months alone. Behind this performance is Sky’s innovative Sky+ technology, the enhanced picture and sound quality of HD and their outstanding range of content from great brands, with 33 channels broadcasting over 13,000 hours of HD content every month.

The success of Sky+HD has been a key driver of Sky+ in the quarter, with 435,000 net Sky+ additions, to reach 5.5 million customers (58% of the base). Importantly, Sky+ is not only contributing to improved loyalty among existing customers, it is also helping to attract new customers to Sky. Around 90% of new customers during the second half of the financial year joined us with either Sky+ or Sky+HD, compared to 56% in the comparable period.

Customer Metrics

                                Quarter Ended
                         --------------------   Closing Base
'000s                    30-Jun-09  30-Jun-08      30-Jun-09
                         ---------  ---------   ------------
Net Customer Additions         124         92          9,442
Additional products
  Sky+                         435        321          5,491
  Multiroom                     66         33          1,835
  Sky+HD                       291         33          1,313

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