City alarmed over lower prices at Sky

A SHAKE-UP in the packages offered by BSkyB has raised City fears that the money the broadcaster makes from each new subscriber will be cut.

BSkyB will unveil prices this month for six packages of channels instead of the present two. But the expected lower starting prices could mean that the average revenue per subscriber - a key measure for the company - could fall.

BSkyB is planning to introduce the structure in September. It is the first such change since chief executive James Murdoch announced last summer Sales edge: Sky's Buffy the Vampire Slayer that the broadcaster needed to increase its marketing investment substantially.

The change will see its basic channel offering split into smaller mixes based on children, music, factual and lifestyle channels.

The changes are aimed at making the station more attractive to potential subscribers who might previously have been put off by having to pay for channels they did not want as part of a larger package.

City analysts warned that the changes could hit the key measure of revenue per user - an easy guide to how much money the company is making from each customer.

'Potentially, there is quite a big reduction here,' says Guy Lamming of investment bank Cazenove. Revenue per user is about £39 a month, but Cazenove suggests this may come down by up to £5 a month for new subscribers.

There is also a fear that subscribers may take cheaper packages of channels.

A spokesman said the changes were aimed at targeting different audiences for its services. The company held to its target of 10m subscribers by 2010. It has 7.7m currently.

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Create Account you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy policy .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in