Pay TV giant Sky has announced a 16.8% fall in profits for the 6 months to December 31st.
Although revenue was up by more than 6.3% profits fell to to £527m thanks to higher content acquisitions costs and investment and new connected services such as NOW TV.
Sky has been under increasing pressure from rival BT which has snapped up a host of top sports rights, forcing Sky to pay more to hold on the content it already has.
The company said it benefitted from more customers upgrading to its HD pack and now has 5 million customers paying extra for the higher quality pictures it offers.
It’s also increased the number of customers taking TV, phone and broadband by 534,000 customers to 36% of its subscriber base.
Sky attempted to soften the impact of its profits fall by announcing an extension to its HBO deal which gives it exclusive access to such as Game of Thrones, Boardwalk Empire and Girls.
It’s also announced six long-term rights agreements including WWE, exclusive live coverage of the 2017 British & Irish Lions Tour to New Zealand and a four-year deal with the Scottish FA beginning next season for the Scottish Cup, international friendlies and Scottish FA Youth Cup.
Jeremy Darroch, Chief Executive, commented: “The investments we are making to accelerate growth in connected TV services are delivering excellent results.
“We added a record 1 million connected Sky+HD boxes in Q2 – almost 11,000 a day – to take our base of connected homes to 4.4 million. This explosive growth means that Sky has quickly established itself as Britain’s biggest connected TV platform and, with millions of customers yet to connect their boxes, there is still a big opportunity ahead.”