MUMBAI: UK pay TV service provider BSkyB has posted operating profit of ?1.07 billion for the year, up from ?872 million last year.

Revenue stood at ?6.5 billion, up from ?5.7 billion a year ago.

BSkyB has 10.3 million customers with net growth of 40,000 TV customers (DTH) and 31,000 standalone home communications customers in the quarter. Sky+HD customers reach 3.8 million, up 30 per cent year on year. There was growth in all home communications product lines with 2.4 million net additions in the year.

BSkyB chairman James Murdoch said, "We are pleased to announce both a 20 per cent increase in the ordinary dividend and our intention to return ?750 million to shareholders through a share buy-back programme."

BSkyB CEO Jeremy Darroch said that while Sky is not immune to tougher economic conditions, it has continued to see good demand across its product portfolio as customers respond to the great quality and value that is offered. "The performance in home communications was particularly strong as we continue to grow all product lines. Over the year, we increased the number of customers taking all three of TV, broadband and telephony by 37 per cent and extended our potential reach by selling home communications products independently from television for the first time. We now have over 100,000 customers taking standalone broadband and telephony products and we see plenty of scope for continued growth."

BSkyB launched Sky Atlantic HD and Sky Living HD, while extending its leadership in high definition and 3D.

Darroch said that with a consistent strategy and a clear set of priorities, the company is well positioned for the opportunities ahead as it enters the new financial year. While the expectation is that the environment will remain challenging, the company will continue to pursue a balanced approach to growth and returns, based on sensible investment in areas of long-term advantage and a strong focus on operational efficiency.

BSkyB recently announced a price freeze for existing customers across television and home communications packages until at least September 2012.

TV additions for the quarter were 40,000, bringing the total TV base to 10.187 million. Within this loyalty remained stable with churn of 10.4 per cent in the quarter and ARPU increased by six per cent to ?539, benefiting from a higher penetration of additional products. ARPU was ?5 lower than the previous quarter largely due to the unwinding of a VAT benefit as a result of a reduction in the frequency of the customer magazine.

Darroch said that while product growth was broadly based, home communications performed particularly well as more customers saved money by switching their services to Sky. Net product additions across broadband, telephony and line rental increased to 595,000 in the quarter, 27 per cent higher than the prior year.

BSkyB currently has 107,000 standalone home communications customers and, in total, added over 420,000 new households in the year.

The company‘s performance in home communications means the number of customers choosing each of television, broadband and talk has grown by 37 per cent on last year to 2.8 million customers, representing 27 per cent penetration of the base.

"We have continued to extend our broadband network coverage, unbundling 385 additional exchanges in the year, increasing our footprint to around 80 per cent of households in the UK. At the same time, we are improving the economics of our home communications business by migrating more customers to our own network. We now have 1.7 million fully unbundled customers, 51 per cent of our broadband base," said Darroch.

BSkyB closed the quarter with more than 3.8 million high definition (HD) customers, an increase of 30 per cent on last year. In the context of exceptionally strong growth in the prior year following the reduction in the price of the HD box and the Fifa World Cup, net quarterly additions were lower than the prior year at 136,000.

"As penetration of HD-ready sets increases and our HD content offering continues to grow, we see a significant opportunity to continue adding HD customers," Darroch said.

On the sporting front, Sky Sports has achieved record audiences for last season‘s Premier League, with an average audience of 1.4 million viewers per game, 11 per cent higher than last year.

On the technology side, progress is being made in 3D, with Sky 3D channel winning a Bafta award for Sir David Attenborough‘s ‘Flying Monsters‘, the first 3D programme ever to win a Bafta award. Sky 3D also achieved another first when it screened Matthew Bourne‘s production of ‘Swan Lake‘ in conjunction with Sky Arts, the first full-length ballet to be shown in 3D.

"To support and facilitate further innovation and development of 3D content we are today announcing the formation of a new production company with Atlantic Productions, the producers of ?Flying Monsters‘, to develop original 3D programming for UK and international audiences," Darroch said.

In terms of the future, the company will continue to invest in content, giving more people reasons to choose Sky. "In line with this strategy, we have announced plans to increase our investment in UK originated content and production by more than 50 per cent to ?600 million in 2014. This will include weekly, original British comedy in 2011, a threefold increase in hours of original British drama and a tripling of our arts programming budget," Darroch said.
 

MUMBAI: James Murdoch‘s fate as BSkyB chairman could be decided on Thursday when the pay TV service provider‘s board meets to discuss corporate governance.

BSkyB will announce its financial results on Friday.

Two former News of the World executives have accused Murdoch of misleading Parliament when he learnt of the reporting practices of the former newspaper. Some media reports suggest Rupert Murdoch may be forced to sacrifice his son to save his empire in much the way that Abraham in the Bible had to sacrifice his son. There is also speculation about whether Lachlan could return to the fold if the sacrifice is made.

Media reports also state that the US Department of Justice has been preparing to issue subpoenas as part of preliminary investigations relating to alleged foreign bribery and alleged hacking of voicemail of 9/11 victims.

Meanwhile, US media conglomerate News Corp‘s Management and Standards Committee (MSC) has published its Terms of Reference (ToR). The MSC is authorised to co-operate fully with all relevant investigations and inquiries in the News of the World phone hacking case, police payments and all other related issues across News International, as well as conducting its own enquiries where appropriate.

News Corp has authorised the MSC to have oversight of, and take responsibility for, all matters in relation to the News of the World phone hacking case, police payments investigation and all other connected issues at News International (NI).

These include, but are not limited to, the police enquiries, civil proceedings, Parliamentary proceedings, Lord Justice Leveson‘s public inquiry and the PCC.

The MSC shall ensure full co-operation with all relevant investigations and is authorised to conduct whatever internal investigations it thinks fit to enable it to carry out its role in relation to all NI papers.

The MSC has powers to direct full co-operation from NI personnel with all external and internal investigations and to preserve, obtain and disclose appropriate documents.

The MSC will review existing compliance systems and will recommend, and oversee the implementation of, new policies, practices and systems designed to create an updated and robust governance, compliance and legal structure for NI.

The MSC will report directly to Joel Klein, EVP and News Corporation board director, who continues to have executive authority over these matters. 

Joel Klein shall in turn report in this role directly to Viet Dinh, an independent director and Chairman of News Corporation‘s Nominating and Corporate Governance Committee. Joel Klein and Viet Dinh shall keep the News Corporation board of directors advised, as appropriate.

As already announced, the Chairman of the MSC is Lord Grabiner QC. The full-time executive members of the MSC are William Lewis and Simon Greenberg. Jeffrey Palker continues in his role as News Corporation‘s General Counsel for Europe and Asia as well as being an executive member of the MSC.

Linklaters has been appointed as legal adviser to the MSC.

The MSC is authorised to retain such other professional advisers as it thinks fit.
 

MUMBAI: While facing the parliamentary committee yesterday, Rupert Murdoch admitted that News of the World had been "caught with dirty hands", though he was not to blame for wrongdoing at the paper and "clearly" had been misled by his staff.

Murdoch started the session with an apology saying it was the "most humble day of my life".

Murdoch also hit out at his rivals for the failure to land the BskyB bid.

During the three-hour grilling by MPs on the Culture, Media and Sport committee, Murdoch stated: "A lot of people had different agendas I think in trying to build this hysteria. All our competitors in this country formally announced a consortium to try to stop us and they caught us with dirty hands and they got the story around."

Murdoch claimed that he was "absolutely shocked, appalled and ashamed" by the hacking of murdered schoolgirl Milly Dowler‘s phone.

But saying that he had no intention to resign, Murdoch refused to take responsibility for the scandal. "I do not accept ultimate responsibility. I hold responsible the people that I trusted to run it and the people they trusted. Because I feel people I trusted, I?m not saying who, let me down and behaved disgracefully. They betrayed the company and they betrayed me and it?s for them to pay."

Murdoch insisted he had no knowledge of the out-of-court settlements made by News International with chief executive of the Professional Footballers? Association Gordon Taylor and PR consultant Max Clifford ? despite them receiving hundreds of thousands of pounds.

Murdoch also claimed that he didn?t know that former News of the World editor Rebekah Brooks had admitted that journalists paid the police for information.

Labour MP Tom Watson, who has led the crusade against phone hacking, asked why he had not investigated these claims.

Murdoch said: "I didn?t know of it. This is not an excuse. Maybe it?s an explanation of my laxity. The News of the World is less than 1 per cent of this company; it employs 53,000 people around the world."

Both senior and junior Murdoch denied the company had tried to cover up on the phone-hacking crisis.

Murdoch junior added: "It is appalling to think that anyone associated with one of our papers would have done something like that."

Labour MP Tom Watson said it was "revealing in itself" that Rupert Murdoch did not know about the payments to hacking victims. The Murdochs began and ended their evidence session with an apology. James said: "I would just like to say how sorry we are to the victims of the illegal voicemail interceptions and to their families."

His father said: "I would just like to say one sentence?this is the most humble day of my life." He added: "James and I would like to say how sorry we are for what has happened. especially with regard to listening to the voicemail of victims of crime. At no time do I remember being as sickened as when I heard what the Dowler family had to endure ? nor do I recall being as angry as when I was told that the News of the World could have compounded their distress.

"Apologising cannot take back what has happened. Still, I want them to know the depth of my regret for the horrible invasions into their lives. I fully understand their ire. And I intend to work tirelessly to merit their forgiveness."

An alliance of media companies including the Telegraph group, the Guardian, Trinity Mirror ? the owners of the Daily Mirror ? and Associated Newspapers, has opposed Mr Murdoch?s takeover of the 61 per cent of BSkyB he does not already own.

Meanwhile, during the session Rupert Murdoch?s third wife Wendi Deng exhibited some of her boxing skills when her husband was attacked with a paper plate covered in shaving foam. She reacted quicker than anyone else including James. The man is a British comedian, popularly known as Johnie Marbles. He was arrested for suspicion of assault.