Report Overview

Sky UK Q2 2019 results: strong subscriber growth and long-term investment in original content

Sky’s Q2 results were encouraging overall, with significant subscriber growth swinging direct-to-consumer revenue growth back to positive. ARPU declined once more, since new streaming customers are taking lower-priced products, but total revenue growth accelerated to 2.4%

EBITDA rose 20%, primarily due to the dropping out of some large one-off costs. Next quarter, Sky will begin making savings on the new Premier League rights contract, and increased football rights costs in Italy and Germany will have annualised out

Having launched Sky Studios in June, Sky is focused on producing original European content, with ambitions to double spend over the next five years, in a calibrated response to the Netflix-led race for content

Contents

Headline financials

• Strong DTC subscription growth; ARPU still weighing
• Content revenue solid, with encouraging prospects
• Advertising revenue: worrying, but unclear outlook
• Bottom line: helped by lower operating costs

Wider context and other developments

• UK
• Continental Europe

List of charts/tables

Figure 1. Headline financials ($m) and YOY constant currency growth rates

Figure 2. Sky retail customer net adds (000)

Figure 3. UK homes subscribing to Sky TV (m)

Figure 4. Sky direct-to-consumer revenue growth at constant currency

Figure 5. Broadband entry level pricing, new customers (£/month)

Figure 6. Broadband high speed pricing, new customers (£/month)