Murdoch's BSkyB says loss narrows

Murdoch's BSkyB wins more customers to digital satellite services

LONDON (CNN) -- British Sky Broadcasting, Europe's second-largest pay-TV broadcaster, said its third-quarter loss narrowed as it signed up more people to its digital satellite platform.

BSkyB (BSY), which is 36 percent owned by Rupert Murdoch's News Corp, said on Friday it made a loss of £30.8 million ($44 million), or 1.6 pence a share in the three months to March 31, compared with a £111.1 million loss, or 6p a share, a year ago.

Murdoch's BSkyB has said it expects to lose about £22 million from the closure of rival digital platform ITV Digital, which paid money to carry its channels. BSkyB, like its bigger rival Canal Plus, has been losing money as it buys sports and film rights to attract customers.

The satellite broadcaster posted a second-quarter loss of £1.26 billion in February after writing off the value of its stake in Germany's KirchPayTV, which filed for bankruptcy. Its pay-TV business became the second Kirch company to file for protection from creditors.

BSkyB has an option to sell its 22 percent stake in KirchPayTV, which in turn owns Germany's biggest pay-TV company Premiere. But BSkyB said "its is unlikely to receive a significant amount, if any amount, in the event of the group exercising the put option."

The London-based company signed up 171,000 customers to its digital service in the third quarter, taking its total subscriber base to 5.9 million. Analysts polled by Reuters had expected BSkyB to add about 150,000 customers. BSkyB has a target of 7 million subscribers by the end of 2003.

Average revenue per user, or the amount of money each customer spends on its services including interactive betting and shopping, rose 11 percent to £341.

Chief Financial Officer Martin Stewart told Reuters: "We have seen sales pick up since the switch off of ITV Digital."

Operating profit before costs rose 33 percent to 129 million in the nine months ended March, against £97 million a year earlier. Analysts were expecting a profit of £120 million.

"The results are commendable," Paul Richard, media analyst at brokerage Numis, told Reuters. "The operating figures were ahead of our expectations while subscriber numbers and revenue were in line."

BSkyB said marketing rose to £308 million, up 6 percent on the comparable period a year ago, while programming costs increased by £215 million to £1 billion, principally as a result of a new Premier League football contract.