The company reported a 25 percent revenue increase to £2.3billion ($3.27bn/B3.72bn). Programming costs increased to £1.134bn ($1.61bn/B1.83bn) in the year, with sports costs increasing by £31m ($44.5m/B50.64m) to £C-417m ($593m/B674.86m). This was primarily a result of a contractual increase in the costs for English Premier League soccer - together with the cost of cricket, rugby union and rugby league rights. This compares with an increase in movie costs of £59m ($84m/B95.6m) to £336m ($478m/B543.99m).
BSkyB said that the next three years' coverage of the Premier League, the Ryder Cup and the England soccer team's next four internationals, will all benefit from the enhanced coverage available on Sky Sports Extra. Premiership Plus coverage of an extra 40 Premier League games via a season ticket or pay-per-view starts on Sky Box Office in August.
Meanwhile, Sky Interactive has begun working with other channel providers 'to bring the benefits of interactivity to a wide range of channels on Sky digital'. In June, the BBC launched its own enhanced Wimbledon coverage available on the Sky platform, offering a choice of up to five live matches from a variety of courts with constantly updated scores. A similar service was available recently for the BBC's coverage of the Open Golf Championship.
Interactive services are also key to squeezing more revenue from each subscriber. Business models using fixed price telephone calls to facilitate micro-payments have started to generate significant revenues, said the company.
Sky Sports Quiz, which is accessible by pressing a button directly from the Sky Sports channels as well as from the interactive services menu, has generated over 1 million premium rate calls to date, the company said.
In relation to interactive betting, Sky announced a 50:50 joint venture with Ladbrokes to develop and operate a fixed-odds and pools betting business linked to Sky channels on Sky Digital.
In addition to its 50 percent share of net profits, Sky will receive an upfront cash payment of £30m ($44m/B50.07m) on completion and ongoing operational payments from the joint venture, linked to both betting volumes and profitability.
Already included within the interactive revenues of £93m ($132m/B150.22m) for the year are gaming revenues of £78m ($111m/B126.32m). Gaming costs for the year, however, were £75m$106m/B120.63m).
The company added that future gaming revenues will be accounted for within the Ladbokes/BSkyB joint venture, including the proposed contribution of BSkyB-owned bookmakers Surrey Sports to the venture.
In terns of advertising, BSkyB said that ad revenue increased by £28m ($40m/B45.52m) to £271m ($385m/B438.15m), reflecting the increased penetration of Sky's channels within UK TV homes, greater sponsorship revenues and the introduction of dedicated advertising sales for the Republic of Ireland.
The company quoted a report by research agency BMRB saying that Sky Sports 1 and Sky Premier were the two most appreciated channels on the platform and that 'the higher level of attention generated by these channels makes viewers more likely to watch commercial breaks'.
The Group was less bullish about its stake in KirchPayTV. The Group's share of KirchPayTV's pre-exceptional operating loss for the year was £116m ($165m/B187.78m).
The company said: "Whilst believing in the long term potential of pay television in Germany, the Group does not expect a short term improvement in KirchPayTV's financial and operating performance since conditions for KirchPayTV remain challenging. The Group continues to monitor KirchPayTV's performance closely."
At June 30 2001 KirchPayTV had 2.3 million subscribers of which 2.1 million were digital; 79 percent of the digital subscribers were taking one of the top tier packages.
The importance of sport to almost every revenue stream in British satellite broadcaster BSkyB's digital offering has been highlighted by the release of its annual results for the year ended June 30, 2001.
