British Sky Broadcasting Group PLC's Strategy Is to Focus on the High-Spending Subscribers. (Opinion)

By Snoddy, Raymond | Marketing, February 14, 2002 | Go to article overview

British Sky Broadcasting Group PLC's Strategy Is to Focus on the High-Spending Subscribers. (Opinion)


Snoddy, Raymond, Marketing


There will now be months of speculation over whether BSKYB is prepared to bring down German media group Kirch to get back the money it invested, or whether the real aim is destabilisation and a bargain basement takeover.

The signs are that the satellite broadcaster is being its normal, straightforward self and that it simply wants its pile of nearly [pounds sterling]1bn back and will do whatever it takes to achieve that aim.

Kirch must have been pretty desperate for money in the first place to give BSkyB, a sister company of The Times, an option to have all its money back if things didn't work out.

This German adventure should still prove costly for BSkyB as Kirch executives openly admit they don't have the money.

But who knows what bits the impending chaos in Munich will throw off. There will not be a queue of predators to buy the loss-making German pay-TV channel, Premiere. But the fact that Kirch owns the global TV rights to this year's World Cup finals and the 2006 contest will have been noted.

BSkyB's problems in Germany and the [pounds sterling]985m write-off acknowledging there is no guarantee the money is coming back have obscured interesting things in the company's results.

A real pointer for the future is that in just six months interactive revenues rose by 149% to [pounds sterling]91m. BSkyB has seen major brands Woolworths and Argos back out of its Sky Active service, but it has clearly found things that work- games, betting and extra TV services. Betting via interactive TV, the web and telephone produced [pounds sterling]49m and is likely to grow. …

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