BSkyB has increased its subscriber base in the Republic by another 5,000, but its shares in London were dealt a severe blow as the market reacted negatively to British subscription numbers.
The number of Irish consumers paying for Sky Digital reached 323,000 in the fourth quarter, up from 318,000 in the previous quarter.
This was an increase of 37,000 subscribers over the last 12 months, representing year on year growth of 13 per cent. Sky Ireland chief executive Mr Mark Deering said almost one in four households were now subscribing to Sky Digital.
In London however the reaction to BSkyB's results was very negative. The company's shares plunged after it revealed it only added 81,000 subscribers in the UK and Ireland in the three months to June 30 for a total of 7.4 million.
This is well short of the 100,000 subscribers it needs to add per quarter to hit its target of 8 million subscribers by the end of 2005.
Chief executive Mr James Murdoch, son of Rupert Murdoch, said profit margins would suffer in the next three years as it spent more on marketing and advertising in a bid to boost subscription growth.
The stock fell 19 per cent - its biggest one-day decline - to close at a five and half year-low of £4.88 sterling (€7.39). This wiped some £2.2 billion sterling off its market value.
Mr Murdoch told journalists that despite the gloom he was setting a new target of 10 million subscribers by the end of 2010. Based on a pro-rata calculation this means the Republic would need to chip in about 440,000 subscribers by then.
Speculation has increased that BSkyB in Britain and the Republic will now look at pricing its 92 different packages differently. Some people in the company believe BSkyB must do more to make its basic family package more attractive.
Mr Murdoch said advertising and marketing spend would need to increase by 40 to 50 per cent next year in order to bolster subscription sales. This activity is expected to repeated in the Republic.
Mr Murdoch warned that profit margins could fall short of expectations through 2007 and subscriber growth could be patchy in 2005.
"We are going to have an abnormal year (in 2005) and accelerate at the end, and we want people to be prepared for that," he said at a news conference.
The company's net subscriber additions have fallen short of expectations for the last two quarters.
Mr Murdoch also said the average amount of revenue it gets from subscribers, known as ARPU, could decrease as Sky broadens its pay-TV packages. He urged investors to look at margins and profitability as the best signs of health.
Profits were not a problem in the year to end-June, as BSkyB beat expectations with a pre-tax profit before amortisation and other items of £514 million sterling. - (additional reporting, Reuters)
