BSkyB CFO Touts 'Significant' Upside for Further Growth

3:43 AM PDT 9/5/2012 by Georg Szalai

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The U.K. pay TV giant expects to continue adding subscribers and selling more services to existing customers despite increased competition.

LONDON - U.K. pay TV giant BSkyB may be facing increased competition, but sees "significant" room for further growth, CFO Andrew Griffith said here on Wednesday.

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The U.K. pay TV giant expects to continue adding subscribers and selling more services to existing customers despite increased competition, he told the Deutsche Bank Technology, Media, Telecommunications investor conference.

"We see significant headroom for growth," Griffith said. "We are a growth company, and we will remain a growth company."

BSkyB, in which Rupert Murdoch's News Corp. owns a 39 percent stake, more than doubled its earnings per share over the past four years and added over £2 billion ($3.18 billion) in revenue, the CFO highlighted.

The U.K. has about 14 million pay TV homes despite a total number of 27 million households, providing more upside, Griffith said. And despite economic challenges, the British market is "relatively affluent," he said.

Griffith highlighted that under CEO Jeremy Darroch, a former Procter & Gamble executive, BSkyB has continued to offer various products and brands to reach different target groups. "We are now a broadly based multi-product company," he said. "And we are broadening the distribution of our content."

One such new form of distribution is over-the-top broadband video service Now TV, which recently launched with movies and will add sports content later this year.

Griffith on Wednesday once again defended the service, which doesn't require a pay TV subscription and offers a pay-as-you-go payment option, as not cannibalistic to the company's core audience. "Sky customers are happy," he said, highlighting stable subscriber churn. "It is a very clearly differentiated offer" that does not have the same depth and breadth as the full pay TV service. Pay-as-you-go plans helped the cell phone industry expand its penetration beyond the subscription contract business, he added.

NowTV, which is seen as an answer from an established TV player to Netflix and Amazon.com's Lovefilm, will help BSkyB attract some of the U.K. homes that don't get pay TV service yet, management has previously said.

Email: Georg.Szalai@thr.com
Twitter: @georgszalai