Sky Italia unveiled a US$30m loss in its last financial quarter, down from a profit of US$10m a year ago, and a drop of 63,000 subscribers from the previous quarter.
Commenting on the loss, News Corp said Sky Italy continues to operate in an “extremely…
Sky Italia unveiled a US$30m loss in its last financial quarter, down from a profit of US$10m a year ago, and a drop of 63,000 subscribers from the previous quarter.
Commenting on the loss, News Corp said Sky Italy continues to operate in an “extremely challenging business and economic environment,” adding that “subscriber growth is clearly below our expectations.”
The broadcaster, which has been involved in a bitter race against Mediaset’s own pay-TV service, saw revenues decline by 2% year-on-year, while monthly ARPU dropped by E2 to E43.
However, News Corp insisted that the business is “very profitable” and said the group remains confident “in the longer-term growth in this underpenetrated market.”
It also pointed out that churn was much weaker among its premium subscribers, which represent 47% of its subscriber base, up from 22% a year ago.
Sky has repeatedly complained of the unwelcoming environment in Italy, where the regulatory system is seen as favourable to Mediaset, which is controlled by Prime Minister Silvio Berlusconi.
Its situation could become even tougher if cabinet approves new rules capping adverts on pay-TV platforms. Starting in 2012, the proposed regulation would limit the amount of advertising allowed per hour to 12%, down from 18% last year.
Free-to-broadcasters, in exchange, would be allowed to increase their advertising to 20% per hour, from 18%.
Sky, which recently launched its own free-to-air operation, has denounced the rules for seeking to harm its growth.