Sky’s annual losses doubled last year, as it spent more money on programming and related costs for its broadband services. It also increased its expenditures on hardware like mobile devices and Sky glass TVs.
The company, which internet enabled smart TV Sky Glass, as well as its mobile, broadband, and streaming services.
Sky’s modest improvement has been offset by the decline in popularity of Sky Q boxes as consumers increasingly turn to streaming and smart TVs.
The company reported a slight drop in advertising revenues, from £1.27bn down to £1.2bn. It said that the revenue “remains stable despite the pressure on the market caused by the cost-of-living crisis”.
Warner Bros Discovery’s (WBD) streaming service Max will launch in the UK by 2026. The company is expected to face increased market pressure. WBD owns HBO, Harry Potter, and other franchises. It also has a deal with Sky to distribute all of its content. This agreement is set to be renegotiated next year. Sky’s revenue could be put under more pressure if it loses the WBD content, and the US rival company.
Sky’s impairment of £327m reflects the difficulty media companies have in managing collaboration deals. SkyShowtime is a joint venture between the US media giant Paramount and Channel 5 owner Sky.
Sky’s operating costs increased marginally from £10.3bn up to £10.45bn. Programming costs also increased to £3.45bn. Direct network costs increased from £1.66bn to £1.66bn, in line with Sky’s growing number of mobile customers and broadband subscribers.
The group has also written off £1.2bn in loans to its subsidiaries located in Germany and Italy.
Sky’s costs for employees increased from £843m (£843m) to £887m (£887m), as the number of its staff increased from 9,528 up to 10,036. Unnamed director received £3m as the highest salary.
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