BSkyB sees upside in the downturn

CFO tells confab TV viewing seems on the increase

NEW YORK -- U.K. satellite TV giant BSkyB sees opportunities to more aggressively market to cost-conscious consumers in this economic downturn.

The company, controlled by News Corp., is looking to push the value of bundled services, CFO Andrew Griffith said here Tuesday at the annual UBS Global Media and Communications Conference.

TV customers who also sign up for broadband services from the company can save more than 200 pounds ($296) per year, and call center staff getting rings from users asking for savings will highlight this opportunity, he said.

Griffith also argued that content is key in a downturn. “Great content is more important than ever at a time when customers spend more time at home,” he told the UBS crowd. Later, he also said TV viewing seems to have increased in recent weeks and months amid a deepening economic downturn.

Asked about upcoming big content deal negotiations, Griffith said talks with the Premier league for U.K. soccer rights should start in the first quarter. BSkyB has a three-year deal through mid-2010 for four Premier league packages out of the league’s six. Setanta holds the other two.

Griffith called the soccer rights “an important piece of content” and said it “drives value for our customers.” He didn’t comment further on how aggressively BSkyB could bid for the rights.

Asked about a possible play for broadband TV and telephony provider Tiscali, he wouldn’t comment in detail, but said BSkyB takes a “pretty skeptical gaze” at any potential broadband acquisition, arguing the company can meet its goals alone.

For any broadband deal to make sense, “you’d have to believe there are real, tangible synergies,” Griffith said. He signaled that the potential upside to Tiscali’s reach could be attractive.

Griffith also touted BSkyB’s HD offerings, which now amount to 29 channels and more than 11,000 hours of programming per month, he said. That’s 40 times the amount offered by cable competitors, he added. Griffith argued there is more HD upside given that only 7% of customers currently subscribe to HD services.

Other areas of potential future growth are bundled services and the digital switchover.

Only 12% of BSkyB users take TV, broadband and telephony services, the CFO said.

The digital switchover by the end of 2012 means that up to 3.3 million analog-only TV users will be up for grabs, and BSkyB expects to win its share of those, Griffith said.