|
|
| RUPERT MURDOCH CHAIRMAN  |
Sky digital has got off to a great start. After just ten months we attracted more than 1,000,000 digital customers, which is an enormous achievement. I would like to thank all our staff, whose creative and innovative spirit made it possible.
Results 1998/99 We made a huge investment in distribution and programming for the digital launch, an investment which has had an adverse impact on profits and cash flows this year, but which will prove extremely worthwhile. In May 1999 we announced a new strategy to drive subscriber growth by giving customers a free set-top box, discounted telephony and free Internet access. I am confident that this will create significant value for shareholders and bring the benefits of digital to more and more British homes. BSkyB operates in a fast-developing high-technology market. By investing in our business, we have unprecedented opportunities to achieve higher returns for shareholders. To make the most of these opportunities and maintain gearing at efficient levels, the Board has suspended dividend payments at this time. Cash generation from operating activities remains excellent and the effect of investment on profits should be seen in the light of the excellent digital customer numbers. Our future At BSkyB we are determined to become the leading provider of entertainment, information and communication to British homes in the broadband age. Our aim is to bring Sky digital to every home in the country - as quickly as possible. How? By removing barriers to customer take-up with our free box offer, by creating programming that is unique and relevant to each customer and by developing an array of New Media services. Our free box offer puts us in a strong position to attract new customers and transition existing customers to digital. Our investment in original production will provide our customers with the very best content available - whether they want movies, documentaries, drama or sports. We are also optimising New Media opportunities that will play a crucial role in our future success. We have already built on the success of our website with the launch of our ISP, Skynow, and are currently introducing enhanced television, allowing interactive viewing of football. Open will allow home shopping and banking via the television. |
Management There have been a number of changes to the Board during the year. On 31 May 1999, Mark Booth left his post as Chief Executive to run e-partners, a subsidiary of News Corporation. I would like to thank Mark for the excellent job he did at BSkyB, leading the most successful digital launch the world has seen. Tony Ball became Chief Executive on 2 June 1999, joining us from Fox/Liberty Networks. From 1993, Tony spent three years at BSkyB during which time he held the positions of Head of Production and Operations of Sky Sports and General Manager, Broadcasting. I am delighted that he accepted the challenge of continuing BSkyB’s success in British television history. Sam Chisholm, Chief Executive from November 1990 to November 1997, retired as a Non-Executive Director on 5 May 1999. David Chance, Deputy Managing Director from January 1994 to December 1997 retired as a Non-Executive Director on 9 August 1999. Graham Parrott also retired as a Non-Executive Director on 29 October 1998. I thank them all for their enormous contribution to the success of BSkyB. I would also like to take this opportunity to welcome Morton Topfer and Letizia Moratti who joined the Board as Non-Executive Directors early in May 1999.
Outlook I would like to congratulate all our colleagues on their inspired and strong leadership in achieving the launch of digital and on developing the Company’s strategy to take advantage of the opportunities of the broadband world. The success of the digital launch provides a strong foundation on which to build innovative New Media services. These will help to change our customers’ lives for the better. They will also build the Sky brand in the new world of broadband entertainment, information and communication. |
