Sky programming costs hit £2.5bn

BSkyB’s yearly programming costs have hit £2.5 billion (US$3.9 billion), as the UK satcaster’s British original commissions strategy kicks in.

Within that figure, entertainment programming spend saw double-digit growth of 15%in line with the News Corp-backed platform’s long term pledge to spend £600 million on UK content a year by 2014.

Sky said it currently has close to 90 hours of British content in production, including the ten-part crime series The Tunnel, which is coproduced with French pay TV counterpart Canal+ and based on Nordic noir The Bridge.

Sky also claimed the number of entertainment series attracting audiences of more than a million had risen two-fold in the past two years taking the total to 122.

Overall programming costs for the 12 months to June 30, 2013, were up 8% to £2.5 billion, up from £2.3 billion the previous year. Sports programming, which its includes English Premier League football matches, accounted for a majority of the spend.

Movie costs also increased as rights agreements were expanded to support new products such as Sky Go Extra and a la carte on-demand offer Now TV.

Sky’s move into international distribution through sales wing Sky Vision to sell the shows it is making is also bearing fruit, with Sky claiming this had pushed revenue up, though it didn’t break out any figures.

Overall company revenue for the year was up 7% year-on-year to £7.2 billion, while operating profit was up 9% and stood at £1.3 billion. Basic earnings per share were up 18% to 60p, while ARPU stood at £577, up £29 per customer YOY.

Sky now has a total of 10.4 million pay TV subscribers, having added 34,000 in the most recent quarter, and nearly five million broadband customers. It also reported a 19% increase in VOD service Sky Go users, who total 3.3 million.

“In our television business, there has been an excellent response from customers to our new services,” said Sky CEO Jeremy Darroch. “We’ve seen an explosion in on-demand and mobile viewing as more people connect their Sky boxes to broadband and watch TV on laptops and mobile devices with Sky Go. Sky Go Extra, our new subscription service, has already attracted more than 150,000 customers in just five months.”

Sky plans to launch another 10 channels in the coming year.