Analyst Laurie Davison warns that Sky will suffer rising UK churn and even a falling ARPU but these are “relic metrics” he says. “Growth has shifted from TV subs to triple play and is now coming across transaction revenues (video-on-demand, incremental NOWTV customers), advertising (AdSmart), mobility (Sky Go Extra, SkyQ) and mobile. Relic KPIs, especially ARPU and net adds, do not capture these and require contorted (and largely erroneous) efforts to relate to historical trends when the business was different. No one seeks to analyse quad play leaders like Comcast on such partial metrics.”
As to those key performance indicators, Deutsche Bank is expecting Q4 churn in the UK to be 11.1 to 11.2 per cent, and that Q4 pay-TV net additions to be about 51,000, with ARPU at £565. For Sky Germany, Q4 churn to be 7.4 per cent, net additions to be 63,000 and ARPU €35/month. Sky Italia’s Q4 churn to be 15.1 per cent, net additions to be just 6,000 and ARPU at €42.