Sky has revealed that the rising cost of Premier League television rights due to competition from the likes of BT Sport has hit profits hard, as Rupert Murdoch's broadcasting group announces a landmark move to stop the flow of subscribers away from its service.
Its "churn rate" - the percentage of customers that cancel subscriptions - for the last six months of 2016 was 11.6%, up from 10.2% in the same period the year previous.
To combat this, Sky will now offer its full TV service without the need for a satellite dish, allowing it to target as many as six million European households that have been unable to accommodate a dish. Its Now TV broadband service already allows a limited range of channels with such a set-up, but all 270 of its channels would now be available.
Sky chief executive Jeremy Darroch told the Guardian:
"This is the first time we have been able to offer the full Sky TV service without a satellite dish. It is a big moment for the business."
A loyalty scheme to "reward and recognise members" based on longevity will also be launched.
Picture by Peter Byrne PA Wire/PA Images
It comes as the company reports that Sky UK saw an 18% fall in profits to £620m in the second half of 2016. Sky UK accounts for over 90% of the European broadcaster's profits.
Total profits across the business dropped 9% to £679m.
It was, however, down a mere £65m year-on-year despite the cost of Premier League rights climbing by £314m, while revenues were up 6% to £6.4bn.
Sky is also potentially facing the loss of the Discovery suite of channels over a payment dispute. Discovery, which offers 12 channels including Animal Planet and Eurosport, has threatened to pull programming from February as it believes Sky is refusing to pay a "fair price", using its "dominate market position" to pay less than it was a decade ago.
Darroch responded that Discovery making the argument public was a case of "commercial self-interest".
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