The cancellation (churn) rates for the last 16 quarters range between 9.5% and 11.2%, per Sky’s published results, so are within a range of 1.7%.
They traditionally peak in Sky’s Quarter 1- July to September- where price increases are a factor, then recover in subsequent quarters.
A modest increase in cancellations (churn) is therefore predictable in Sky’s next quarterly results.
Posters on here sometimes suggest that Sky is “in for a major fall” or the opposite- that Sky is so dominant that customers cancelling or downgrading their subscriptions have barely no impact on Sky. However, reality is nearer the centre, in my view- that customers who cancel or downgrade tv subscriptions affect the level of profits.
That may appear like stating the obvious until you consider the business model-
as one analyst- Bank of America Merrill Lynch (BoAML)- explained it last year, the largely fixed cost base of Sky’s pay-tv model means that most of Sky's profits come from the last 20% of its subscriber base.
Thus, it explains in part, why Sky go to significant lengths to retain/win back customers who attempt/proceed to cancel. Also, why Sky analyse/monitor Movies & Sports subscriptions very closely, as these are high-value customers who, despite competition in the pay-tv market, Sky should be best placed to satisfy through their lead in content.
Originally Posted by The Wulfrunian:
“I'd not be surprised Sky seeing a net increase in customers this next year .......”
Although we'll be guessing from other data whether they're traditional Sky TV subscribers, as Sky don't separate them from Now TV subscrbers, who currently pay from £4.99 for a one month commitment, to be counted as a subscriber.