Distribution Our aim is to bring Sky digital to every home in Britain as quickly as possible. We are working to achieve this by providing customers with an unbeatable proposition and by aiming to provide first class service whenever they make contact with BSkyB. That means optimising the skill and expertise of our people right across the business in distribution, marketing, customer management, installation and training. This ensures that the people who are delivering digital to millions of homes across the country are true professionals. Subscriber numbers Total paying subscribers increased by 543,000 during the year, resulting in a total number of cable, DTT and satellite customers of 7,442,000 at 30 June 1999. Of these, 6,853,000 are in the UK and 589,000 in Eire. In the fourth quarter total DTH customers increased 15,000 to 3,460,000. Excluding the effect of the sports promotion in the first quarter, annual churn was 13.4% compared to 15.1% at 30 June 1998. Only 1% of customers who have subscribed to digital since launch have churned. UK cable customers showed a net increase of 393,000 during the year compared to a 469,000 increase in 1997/98, reflecting the slow-down in the cable network build. The DTH pay-to-basic ratio was 296% at 30 June 1999, up from 294% last year, with an analogue ratio of 290% and digital at 319%. The cable pay-to-basic has fallen from 144% last year to 124% this year. While total UK cable customers to Sky’s channels have increased 393,000 in the year, the number taking Sky’s basic channels has increased by 366,000 such that 56% now only take basic channels. BSkyB now operates the largest call centres in Scotland, providing a 24 hour service, seven days a week Customer management The huge task of dealing with the demand for digital is managed by our Customer Management Centres at Livingston and Dunfermline. BSkyB now operates the largest call centres in Scotland, providing a 24 hours a day service, seven days a week. We currently have a core staff of 3,000 people, of which 1,850 are Customer Service Representatives. In addition, temporary staff are brought in to cope with periods of high demand. For example, 1,750 temporary staff were recruited to deal with the massive response to digital, while the success of our free offer encouraged us to draft in 2,500 temporary Customer Service Representatives later in the year. We are now in the process of transferring 1,000 of those temporary staff to permanent positions. In April 1999, we employed around 850 fully trained technicians. Since then, we have employed an additional 2,200 installers around the country to deliver digital faster. Sky Business develops non-domestic revenue. It provides flexible, cost-effective digital programming via cable and satellite to businesses. For example, Sky News is making queuing at the bank less tedious, Nickelodeon is making children’s shoe shopping less stressful and Sky Sports continues to transform an evening at the pub. Digital now gives us the opportunity to dedicate and create channels for different business sectors. The dedicated channel for pubs provides programming to staff and customers alike. Training programmes are broadcast to pub managers and staff. Customer programming helps landlords attract and retain more customers. It also gives advertisers a fantastic opportunity to target 18 - 34 year old, male pub customers. Interactivity is enabling pub quiz leagues and tournaments to be developed across pub chains. In addition, special programmes are made for themed events focused on food and drink promotions throughout the year. On 31 December 1999, we will feature programming showing the new millennium celebrations in a variety of cities around the world. Sky Homes delivers digital to thousands of communities around the country. It is also responsible for marketing BSkyB services to housing developers, local authorities, private landlords and tenants associations with enormous potential opportunities. Local authorities can lease or buy an Integrated Reception System, which distributes programming into each apartment in a block of flats. In the case of new homes, we plan to install digital as a basic service like electricity, gas and water. This is good for the homebuyer and it’s good for the developer.