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Sky attempts to curb customer exodus with series of plans including loyalty programme and ditching satellites

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By Tony Connelly | Sports Marketing Reporter

January 26, 2017 | 4 min read

Sky has admitted that its customer drop-off rate is higher than it would like as competition from BT intensifies but it has announced new measures intended to prevent more people quitting.

The broadcaster revealed its churn rate- the annual percentage rate at which customers stop subscribing to a service- jumped from 10.2% to 11.6% in the same period the year before.

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Sky has saw its operating profits fall by 18% in the six months leading to 31 December

“Churn is not where we want it to be but we've got a good set of plans to bring it down,” said Sky chief executive, Jeremy Darroch.

Part of the turnaround plan will see Sky make its full TV service available over broadband later this year as it looks to break with satellite broadcasting. A broadband service will offer around two million customers who cannot or do not want to install a satellite dish access to its Sky Q service delivered entirely over the internet.

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Plans are also in place for a loyalty programme in UK following success of a similar scheme in Italy. Other measures intended to win over consumers include a new mobile network service offering savings to pay-TV households.

As well as an increase in customers leaving, Sky also revealed that its operating profits fell with a decline of 18% (679m) in the UK for the six months to 31 December 2016, however it remains adamant that its financial performance is nothing to worry about.

Darroch said: “In a year in which we are absorbing significantly higher programming costs, as a result of the step up in Premier League costs, our financial performance has been good.”

The 71% increase in broadcast rights for the Premier League will cost Sky £5bn over three-years but the coverage will serve as a major focal point in its marketing going forward and could help it retain customers.

However, the effectiveness of this asset has been clouded recently; in October audience figures for Sky Sports' Premier League coverage showed a drop dropped 19% on the previous year. Sky has remained optimistic in the face of declining audience numbers though and is investing its efforts in engaging with younger audiences on social media platforms.

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