BSkyB Grows Quarterly TV Subs, Extends Paramount Licensing Deal

Courtesy of BSkyB
BSkyB CEO Jeremy Darroch

UPDATED: The U.K. pay TV giant, in which Rupert Murdoch's 21st Century Fox owns a 39 percent stake, grew its revenue for the nine months ending in March, but earnings dropped.

LONDON – U.K. pay TV giant BSkyB on Thursday reported stronger TV subscriber gains for its fiscal third-quarter than in the year-ago period and said it has reached a new multiyear licensing deal with Paramount Pictures.

Subscriber growth came despite increasing competition from telecom giant BT, which recently launched a portfolio of sports networks that have aggressively bid for sports rights, and broadband alternatives.

The company, in which Rupert Murdoch's 21st Century Fox owns a 39 percent stake, signed up 74,000 net new TV subscribers in the latest quarter, compared with 30,000 in the same period of 2013.

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The TV user figure for the latest quarter included traditional pay TV customers, as well as subscribers of the company's Now TV online-only video service. Now TV has been growing, but the firm didn't disclose whether traditional pay TV subs, where growth has been slowing amid a more mature market, were also up in the latest period. The company hasn't broken out those figures since starting to include Now TV customers in its sub data.

BSkyB, led by CEO Jeremy Darroch, said it ended March with more than 10.61 million TV subscribers.

Asked during a conference call about suggestions by some that BSkyB may have lost traditional pay TV subscribers for the first time in more than a decade in the latest quarter, Darroch said, "They were just wrong." He said the firm's traditional pay TV and Now TV businesses "both did well."

The company on Thursday reported that nine-months revenue rose 6.6 percent, but operating earnings dropped 8.5 percent and earnings per share declined 3.4 percent. Higher TV sports rights costs were among the factors hitting earnings.

Nomura analyst Matthew Walker said that the latest earnings report showed "good numbers again," while Jefferies & Co. analyst Jerry Dellis said the report included "reassuring TV adds" news. 

The pay TV giant also announced Thursday that it had extended a content deal with Viacom's Paramount in a multiyear arrangement. This will give BSkyB's Sky Movies service exclusive access during the first pay TV window in the U.K. to such releases as Noah, Anchorman 2: The Legend Continues and Jack Ryan: Shadow Recruit, as well as future releases, including Teenage Mutant Ninja Turtles and Transformers: Age of Extinction.  

BSkyB has now extended its existing deals with five of the six major Hollywood studios. The only exception is Fox, whose current arrangement with BSkyB isn't up for another year or so, according to Darroch. 

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