Pay-TV firm BSkyB 's first-quarter subscriber numbers fell short of expectations today in the face of mounting competition to send its shares down more than 6 per cent.
BSkyB, 37 per cent owned by Rupert Murdoch's media conglomerate News Corp, said it added 57,000 subscribers in the three months to September 30th for a total of 7.8 million, amid intense competition and a difficult economic climate.
"It's cable competitors, it's Freeview, and customers have a lot of choices," said Chief Executive James Murdoch, who is Rupert's youngest son.
Freeview, a free digital TV service, has quickly grown to about five million subscribers, providing a multichannel alternative to BSkyB's subscription service.
Analysts on average expected the company to add 67,900 subscribers. Churn, or the percentage of customers who drop their subscriptions, was also higher than expected at 11.7 per cent, due in part to a price increase that added between £1.50 and £3 to most customers' monthly bills.
Shares were down 6.45 per cent to 493 pence this morning, their lowest point in about a year.
Pretax profit rose 13.6 per cent to £200 million, and revenue climbed 8 per cent to £1.023 billion. The company said it was on track to meet its targets of eight million subscribers by the end of calendar 2005, and 10 million by the end of 2010.