News Corp.'s Sky Deutschland Posts Improved 2012 Financials

NEXT IN LINE: Brian Sullivan
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Sullivan was managing director of the customer group at BSkyB. He was put in charge of the German operation in 2010. In more than 13 years at BSkyB, Sullivan was part of the team that developed its strategy, including the launch of an HD service.

The German pay TV group narrowed its losses and grew revenue as subscriber figures hit 3.4 million.

COLOGNE, Germany -- News Corp.'s loss-making Sky Deutschland is not out of the red just yet, but the German pay TV group under CEO Brian Sullivan continues to boost sales and trim losses.

Full-year figures, announced Thursday, show Sky's revenue increased by an impressive 17.1 percent to $1.74 billion (€1.33 billion) in 2012, while net losses were cut by a third to $255 million (€195.2 million). The group continues to -- slowly -- add subscribers, finishing the year with nearly 3.4 million direct customers, a net gain of 351,000. More importantly, Sky is squeezing more out of each viewer, with average monthly revenue per user up to $41.70 (€31.90), a 4.7 percent increase compared with 2011.

STORY: News Corp. to Take Controlling Stake of 54.5 Percent in Germany's Sky Deutschland

News Corp. has thrown considerable financial might into its German TV operations, recently increasing its stake in Sky Deutschland to 54.8 percent to give Rupert Murdoch's firm majority control. The conglomerate also recently extended the German group a five-year, $393 million (€300 million) loan and acted as guarantor for as much as 50 percent of Sky's $2.5 billion (€1.94 billion) deal for pay TV rights to Germany's Bundesliga soccer league through the 2016-17 season.

Murdoch clearly sees potential in German pay TV, which has underperformed compared with its European neighbors. Pay TV penetration in Germany and Austria has shot up during recent years as Sky Deutschland has expanded (along with cable and IPTV operators), increasing from 10.3 percent in 2008 to 17.1 percent at the end of 2011. But that figure pales in comparison with those in France (59.4 percent), the U.K. (56.8 percent) and Italy (35 percent).