As expected, BSkyB’s profits for the three months to September 30 dropped 28 percent, with BSkyB (NYSE: BSY) blaming its battle for the broadband market (and especially with Virgin Media), higher marketing costs, a lawsuit with EDS, and the cost of Premier League soccer rights for the decline. Net income fell to £84 million from £116 million a year earlier. In the FT, analysts questioned whether the levels of investment were too high for the company’s growth.

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At the same time, the company added 83,000 net subscribers, giving it a total subscriber base of 8.665 million. It was also able to reduce its churn rate 0.08 percent from the previous quarter to 11.3 percent - the lowest, the company said, in five consecutive quarters.

From the conference call…

- Picnic CEO James Murdoch refused to be drawn into discussions about the proposed entry-level Freeview and broadband offering, it was “reckless” to comment on an ongoing investigation (Ofcom is currently probing the TV part of the plan). He did, however, say that he found the “motivations” of the four companies (BT (NYSE: BT) Vision, Setanta Sports, Top Up TV and Virgin Media) whose complaints triggered the Ofcom consultation “transparent” and called them a “shame.”

- Broadband: In the week Sky passed the million subscriber mark, the company remains focused on its wholesale line rental product, which it hopes
to have in the marketplace soon, though it has no specific launch dates. They are continuing to look at offering a broadband service that is not bundled with their TV services, but have no particular time set for launching it. Murdoch: “In terms of the economics of it, we’re well aware of what [an unbundled broadband service] might be able to do for us, but we think we have other levers in terms of margins and in terms of business plans. We’re not in any rush.”