February 27, 2018 / 8:37 PM / a year ago

UPDATE 1-NZ's Sky Network Television's H1 profit rises 12 pct helped by lower costs

(Adds monthly package restructure, subscription revenue, background on competition)

Feb 28 (Reuters) - New Zealand’s Sky Network Television on Wednesday posted a 12 percent rise in half-year net profit, as lower operational costs resulting from a dwindling subscriber base came to its rescue.

The subscription television provider attributed its shrinking customer base to the spike in popularity of digital media platforms, such as Netflix and Amazon.com Inc , which have eaten away at the market share of traditional pay television providers.

The company on also said on Wednesday it would restructure its monthly subscription to a cheaper NZ$24.91 a month package with the option to add premium channels at an additional NZ$25, effectively providing a more affordable entry point to its services.

The earlier basic package was priced at NZ$49.91.

“Our total subscriber count declined because we didn’t attract enough new customers who find the new On Demand models appealing,” Chief Executive John Fellet said in a statement.

Revenue fell 5.5 percent during the half-year to NZ$433.1 million.

Operating costs declined 8 percent to NZ$330.8 million.

Sky’s satellite subscription revenue, the largest contributor to its top line, shed 5.5 percent, while advertising revenue dipped 10 percent to NZ$31.5 million.

The subscription television provider posted an interim net profit of NZ$66.6 million ($48.24 million) in the six months to Dec. 31, compared with NZ$59.3 million last year.

The company cut its interim dividend to NZ$0.075, from the NZ$0.15 payout in the previous year to reduce debt, it said in a statement. (Reporting by Devika Syamnath in Bengaluru, editing by David Evans)

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