Positive quarter for Sky as operator prepares for life after Covid

Sky has weathered the storm of the Covid-19 pandemic to increase its subscriber base in the first quarter of the year.

As a part of its Q1 earnings, parent company Comcast confirmed that the European operator’s total customer relationships increased by 221,000 to 23.4 million during the quarter. 

During the period, Sky’s revenue increased by 10.6% to US$5 billion. Direct-to-consumer revenue increased 1.8% to $4.1 billion, which Comcast said was driven by increases in average revenue per customer relationship and customer relationships.

Advertising revenue meanwhile increased by 3.4% to US$574 million, as a result of higher advanced advertising revenue in the UK. Content revenue increased by 1.7% to US$358 million, primarily due to higher wholesale revenue from sports programming.

The only decrease for Sky was its EBITDA, which was down 33.9% to US$364 million. The operator noted that this was as a result of higher programming and production expenses and direct network costs.

Dana Strong

Speaking on her first Comcast earnings call since becoming Sky’s group CEO in January, Dana Strong said that “we’re really, really happy with the fundamentals of the business.”

She said: “Our Q1 results demonstrate the position that we’re in, subscriber numbers up, that’s in fact, quarter one in about six years, churn is down, revenue is up. All of the fundamental factors of the business position us well to exit COVID.”

Strong also addressed the recent developments in European sports rights. She said that “we made a deliberate choice to reduce our investment [in the English Premier League] by 15%” while she spun the  recent loss of domestic rights to Italy’s Serie A to show that it “just demonstrates that we will walk away when we feel the economics don’t work.”

The group CEO said that Sky’s ‘journey’ over the past 15 years has been to “expand our value proposition beyond sport.” she said that viewing is up on Sky channels and streaming, and that churn was down. 

Content aggregation, a key part of the Sky Q model, “is really working” with customers apple to access streaming services such as Netflix, Disney+ and discovery+ via their set top box.

Overall, Strong said that “we’re on track for our ambition of doubling EBITDA over the next several years.”