Game of Thrones has boosted Sky’s revenues and earnings as the popularity of the television series — the most watched ever on the broadcaster’s channels — proved pivotal in attracting viewers.
The European pay-TV group said it had added 160,000 new customers in the first three months of its financial year to the end of September. This is a 51 per cent gain on the same period in 2016.
Like-for-like revenues at Sky, which is subject to a £11.7bn offer from Rupert Murdoch’s 21st Century Fox, rose 5 per cent to £3.3bn. Earnings before interest, tax, depreciation and amortisation climbed 11 per cent to £582m.
The success of Game of Thrones, for which Sky has a deal with HBO to screen ahead of other UK broadcasters, has helped the group tackle the challenge from groups such as Amazon and Netflix.
Chief executive Jeremy Darroch said: “Game of Thrones has become the most watched series ever on Sky . . . in Italy, X Factor has launched to record audiences and we’re pleased with the continued progress of Sky 1 in Germany and Austria.”
British mini-series Riviera also concluded as Sky’s most successful original drama, with 20m downloads.
The company’s shares rose slightly on Thursday, by 1.3 per cent to 926p, as some investors focused more on regulatory hurdles to Mr Murdoch’s 10.75p-a-share offer for the business than on short-term trading performance.
There are also investor concerns over Sky chairman James Murdoch. He faces opposition from shareholders at the group’s annual meeting on Thursday over worries about his independence as he serves as chief executive of 21st Century Fox, as well.
British asset manager Royal London has said it will vote against Mr Murdoch’s re-election, saying the group would be “better served by a truly independent chairman”.
Shareholder advisory groups, including Institutional Shareholder Services, ISS, Glass Lewis and Pensions & Investment Research Consultants, have also called for a rebellion against Mr Murdoch’s dual role and excessive pay at the group.
Turning to strategy, Mr Darroch said the broadcaster had invested in its cheaper Now TV service to lure budget-conscious customers, and this was “going well”.
Globally, some pay TV consumers are cutting the cord on their subscriptions in favour of cheaper options such as Amazon Prime, which costs £79 a year in the UK, and Netflix, whose basic package costs £5.99 a month.
Roddy Davidson, an analyst who follows Sky at stockbroker Shore Capital, said it was “hard to massively get behind the headline numbers” that the broadcaster had disclosed because “they are slightly selective”.
“Five to 10 years ago Sky was the only game in town,” Mr Davidson said. “Going forward there is a fundamental long-term challenge to their subscription model.”
Analysts at stockbroker Liberum took a rosier view of Sky’s prospects, saying the results “look broadly healthy”.
Earlier in the week, UK competition watchdog the Competition and Markets Authority, defined the terms of its investigation into Mr Murdoch’s bid to take full control of Sky, saying it would focus on the “impact on media plurality”.
