Sectors: Media

Though the near-term media sector outlook remains uncertain, there has been much frenetic activity for investors to follow over recent weeks.

BSkyB pleased its followers with news of an excellent year to June, with pre-tax profits powering ahead from £456 million to £1.17 billion. During the year, the blue-chip benchmark constituent managed to acquire an extra 90,000 customers, bringing its total UK customer base to 9.86 million, ever closer to its ten million target.

CEO Jeremy Darroch highlighted a good fourth quarter of the year, during which the number of customers purchasing high-definition services increased to 429,000. BSkyB has also made much progress in swelling the ranks of customers, now one in five, who are opting to purchase its combined TV, broadband and telephone packages.

Given its inexorable growth, it would appear that BSkyB has nowhere to go but up and there are suggestions that News Corporation, the group’s largest shareholder with a 39 per cent stake, may have to increase its takeover price to north of the informal 700p a share offer made in June.

Elsewhere, HMV has begun the ambitious task of challenging Apple’s iTunes for supremacy in the digital download market. The DVD, music and games giant has launched online download service HMV digital in an attempt to gain a foothold in the sector and profit from the increasing trend to download music digitally.

HMV digital is designed with a ‘Download Manager’, that allows users to synch purchases with both Windows Media player and iTunes. HMV, which reported profits of £68.9 million on £2 billion turnover for the year to April 2010, is clearly competing on price, offering five free songs for users that sign up and top 40 singles for 40p for a limited period, a substantive saving on the 99p that iTunes usually charges for its downloads.