BSkyB Posts Record Profits, Touts New U.K.-Wide Internet TV Service

BSkyB Satellite - Sign - 2010
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The pay TV platform announced new plans for a broadband TV service taking on Netflix and LoveFilm later this year.

LONDON – BSkyB posted record first-half operating profits up 16 percent to £601 million ($986 million) on revenues up 6 percent to $5.6 billion and announced new plans to launch a U.K.-wide TV streaming service Tuesday.

CEO Jeremy Darroch – who announced yesterday that Sky had struck streaming TV deals with the BBC’s i-Player service and with ITV’s catch-up platform ITVPlayer – said that later this year it plans to launch a broadband Internet TV service to all homes in the U.K.

Currently its services are available to only the 10.5 million homes that subscribe to its own services but the new subscription based service will target the 13 million plus homes who are not Sky subscribers.

“Alongside the continued growth of our satellite platform this will be a new way for us to reach out to consumers who may not want the whole Sky service.”

But Darroch rejected the notion that Sky was responding to the competitive challenge of Netflix and LoveFilm – both of which have mounted aggressive content land-grabs in the U.K. in recent months.

Sky also faces competition from YouView, the platform backed by content from the major terrestrial players, which is due to launch this summer.

“I do not see [Netflix and LoveFilm] threatening our business at all. It’s further evidence that this is an exciting market and lots of people see opportunities in it,” he said on an analyst call.

“We have competed in the past few decades against all competitors.”

Sky benefited from a $49 million break-fee paid by News Corp., following the collapse of News Corp,’s bid to take full control of BSkyB. News Corp. retains ownership of 38 percent of BSkyB.

Shares in the satcaster rose 3 percent to $11.33 but Darroch said touch economic conditions and squeezed household incomes meant that markets continued to be tough.

“No consumer business can be immune to these conditions and we will manage any short-term headwinds as they emerge,” Darroch said.