Sky Deutschland posts Q1 loss

Adds 1,000 subscribers; average revenue per user rises

News Corp.'s Sky Deutschland posted a bigger-than-expected first-quarter loss Wednesday amid higher programming and marketing costs, but said it added 1,000 subscribers after a 28,000 decline in the year-ago period. At the end of March, the satellite TV firm had 2.471 million total subscribers.

Thanks to a new price and packaging structure and more HD users, average revenue per user reached €28.85 in in the first quarter, up from €24.85 in the year-ago period. Revenue rose slightly from €232.7 million to €234.7 million.

But costs jumped from €277.4 million in the opening quarter of 2009 to €309.4 million in the latest period due to higher costs for German soccer and other program rights, as well as increased sales and marketing initiatives.

That left the bottom line before interest, tax, depreciation and amortization at a loss of €64.5 million in the first quarter, more than twice the year-ago loss of €29.8 million. The after- tax loss rose from €80 million to €97 million.

"I'm encouraged by the progress shown in these results and I'm excited by the opportunities for Sky in the German and Austrian markets," said Sky Deutschland CEO Brian Sullivan. "Much has been achieved in the first nine months since the launch of Sky, but there is still much to do."
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