Sky Italia sheds 86,000 subs, Carey backs Murdoch

News Corp blamed a challenging economic outlook in Italy for the loss of 86,000 customers at Sky Italia in the first three months of the year.

The subscriber losses reduced the overall total to 4.94 million. It did report a small quarterly ARPU increase of €1, taking the monthly total to €42 and operating income of US$40 million (€31 million) for the quarter pay TV platform was up sharply on the US$23 million reported at the same point last year.

“While we are pleased with Sky Italia’s financial performance, the challenging economic environment in Italy is directly impacting gross subs additions in churn,” said News Corp chief financial officer David DeVoe. “We continue to have complete confidence in the long-term growth prospects for this business, given the relatively low pay-TV penetration in Italy and Sky’s strong competitive position there. But we are realistic and that our growth is closely linked to consumer confidence and consumption, which will be challenging, given the economic conditions in Italy over the near term.”

The comments came as News Corp reported a 9% quarterly increase in operating income at its international cable networks, spearheaded by double-digit growth at the Fox International Channels resulting from strong growth in Latin America and Asia. The international cable channels’ advertising revenue grew 7% year-on-year, News Corp said without breaking out the specific figures. Again the growth came from improving advertising and was led by particular strength at the Fox International Channels in Latin America and Asia.

News Corp chief operating officer Chase Carey took the opportunity to back Rupert Murdoch after a damning UK parliamentary report, which denounced the  News Corp Chairman and CEO Rupert Murdoch as ‘unfit’ to lead the company. 
“I flatly reject the Rogue Report’s notion that Rupert is unfit to run a major media company,” Carey said. “That’s unjustified and in many people’s opinion, including my own, a purely partisan finding. Rupert has taken great business risks, especially in the UK, where he’s led News Corp’s heavy investment, building Sky, creating great confident choice to 10 million homes, and creating 19,000 jobs.”

Carey added that the company has no plans to divest its stake in BSkyB.