Dodgy Price Increases

eden_my_ass

I might be jumping the gun here but the letter I got last week told me that the price for my subscription to Sky World (family pack) was increasing to €60, because of the addition of such great programming as RTE 1, Network 2, TV3 and TG4 . As it happens I was going to cancel sports and movies anyway so on the phone I got. After canceling I was told my subscription was now €27. Then I asked if that included the price increase, and was told definitely that there was no increase on the basic package ( I still have those great channels by the way) . Does that not sound fishy to everyone else?

Saruman

Maybe a little yes... but they probably want the basic channels to be a low price as they can advertise then of their low starting point.. the biggest increase is probably due to the sky-fai deal

ShaneOC

I am not sure of the number of Sky Sports subscribers but I would imaging that it is probably around half of all those who subscribe, i.e. 125,000. If you multiply that be €7 you get €875,000 per month, i.e. €10,500,000 for one year. Now the deal with the FAI was for €7,500,000. €3,000,000 profit nice and easy, eh?

Genghis

Originally posted by ShaneOC
€10,500,000 for one year. Now the deal with the FAI was for €7,500,000. €3,000,000 profit nice and easy, eh?

The FAI deal is for four years. So ... thats €42,000,000 over four years - a €34,500,000 Profit. Not including future price increases. Not including future subscribers (growing at 1,000 a week at the moment, and likely to continue over the next 4 years).

Sky are obviously moving along a product life cycle. Stage 1 is clearly to rope in a minimum level of subscribers with attractive deals, channel choice, etc and to grow revenues through new users. Stage 2 is to add valuable content (i.e. Irish channels, and Irish sports), and thus raise revenue by raising average subscriptions.