BSkyB fought back against intensifying competition today by launching a £10 TV box allowing viewers to watch on-demand services.
The broadcaster unveiled the budget Now TV box, which can also give access to Sky Sports and Sky Movies, as it revealed a 12 per cent jump in the number of products its customers take.
Subscriptions rose 3.3 million to 31.6 million in the year to the end of June, lifting pre-tax profits 6 per cent to £1.26 billion, as customers increasingly add products including broadband, HD TV and Sky Go Extra.
Sky hailed a strong summer of sport, which has seen it broadcast Ashes cricket and Lions rugby, as well as Team Sky cyclist Chris Froome's historic Tour de France win.
Sky is battling surging competition from rivals including BT, which launches its own sport channels next month in a head-on challenge to Sky's dominance of pay-TV sport. BT's channels will be free to its broadband subscribers and give viewers 38 Premier League football games a season.
Sky's Now TV box costs £9.99 and wirelessly connects a TV to a broadband connection, giving contract-free access to BBC iPlayer, Demand 5, Sky News and Now TV. Through Now TV, viewers can also pay to watch Sky Sports and Sky Movies.
The device also allows people to catch up on previously-broadcast programmes - known as on-demand TV.
The Now TV device will also challenge the £299 YouView box, a joint venture between BT, TalkTalk, the BBC, ITV, Channel 4, Channel 5 and Arqiva which also offers on-demand TV for free.
Sky said 35 per cent of its customers are now taking TV, broadband and phone services, up from 32 per cent last year. That helped grow revenues 7 per cent to £7.24 billion.
But its churn rate - how many customers are leaving - increased to 10.9 per cent from 9.9 per cent. Sky warned that it expects the year ahead to be challenging as consumer spending remains squeezed.
It also announced plans to buy back £500 million of shares to boost investor earnings.
