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BSkyB Starts to Look a Lot Like ESkyB

London -- British Sky Broadcasting Group plc is edgingtoward status as a dot-com play, adding new businesses to its existing electronic-commerceproperties.

The company's six-month results, issued Feb. 9, alsoprompted investment bank Morgan Stanley Dean Witter & Co. to substantially raise itssubscriber forecasts for the direct-to-home platform.

BSkyB has much to crow about, with 2.6 million digitalsubscribers registered as of Feb. 8, up from 2.06 million at the end of last year.

CEO Tony Ball said the company just had its "best-everquarterly net growth in its 10-year history." He added that BSkyB is confident thatit will have 5 million digital subscribers by June 2001, the end of its next financialyear.

Rebecca Winnington-Ingram, Morgan Stanley's seniorEuropean media analyst, was also bullish. In a recent report, she wrote that BSkyB shouldoutperform cable, at least until 2005. The report forecast that BSkyB will have 6 milliondigital subscribers by late 2002, well before BSkyB's own year-end-2003 target date.

Ball's report on subscriber growth came amid a seriesof announcements from BSkyB indicating that the company is emerging as a dot-com play.

Ball confirmed the formation of a new $400 millioninvestment portfolio for what he called Sky New Media Ventures, which will invest insports and news and lead BSkyB's push into interactive programming.

The investment comes in addition to Open, BSkyB'sinteractive joint venture that is transmitted on the digital-satellite platform.

During the next quarter, Sky News Interactive will begintransmitting as a full-fledged TV channel, allowing viewers to select specific content ofinterest. "Sky aims to be the No. 1 sports Internet site in the United Kingdom within12 months," Ball said.

BSkyB director of new media John Swingewood said thecompany would be able to take advantage of its existing relationships with customers."We have a billing relationship with these viewers. They are already using us as aportal. Now we have to boost the use of the remote and the keyboard for shopping, bankingand bill paying," he added.

Swingewood also said his aim is to bring the complete BSkyBexperience to all platforms -- not only Open, "but also to the Web and to the cellphone. That's where I will probably put most of my effort."