Sky TV says its latest profit results show that all its spending on new technology is starting to pay off.
The results, released today, show net profit in the six months to December 31 increased to $50.8 million, from $42.6 million a year earlier.
In a shareholders statement SKY chief executive John Fellett has put down the profit increase to its MYSKY HDi decoder which entered the market in July last year.
MYSKY HDi allows customers the functions to pause, rewind or record programming to an internal hard drive. Later changes to the network included adding three channels for HD customers.
The costs of launching the HD network included rebuilding the station, upgrading site vans, adding a new transponder and the expansion of fibre links. Fellett says the benefits of that expenditure are now becoming apparent.
"The last two years we've been enduring all the pain. Those investments now are just starting to pay off".
Fellett says Sky has been considering a 3D television channel since an increase in the amount of 3D content being produced was noted.
"We're monitoring how it's doing in foreign countries and how much it will take to do it, and how much interest it generates. In order for 3D to be successful it would have to include movies and sport."
Fellett says sports programming continues to generate much of Sky's viewership and revenue. Evening viewing across the five sports channels have been given a boost since the Winter Olympics began last week.
"I'm probably most excited with the way the Winter Olympic games are going. We're really looking forward to the Summer Olympic Games in 2012"
The network has pay television rights to every live game during the 2011 Rugby World Cup. Highlights from last year included producing the pay-per-view David Tua versus Shane Cameron boxing match in October.
Advertising revenue fell by 16 per cent over the year leading up to December. Fellett says he has not seen the television advertising market in the same depressed state since 1998.
Similarly, TVNZ reported a $17.1m loss to end last year.
Fellett said an overall churn of 13.8 per cent showed Sky lost fewer customers on the HDi service than its standard digital decoder.
The crossover for customers on its UHF network onto the satellite network has been ongoing. Sky channels, not including Prime, on the 20 year old analogue service will no longer be accessible after March. There are fewer than 1000 customers remaining on the network.