Sky unveils new charging regime

Sky has unveiled a "fairer" way of setting the subscription rates for pub customers after consultation with the industry.

The new charging system is still based on rateable value (RV) but offers discounts for those with a sizeable food trade or outdoor areas.

On average, charges will rise between 9 and 11% before rateable value adjustments. Sky has frozen charges for the past two years.

The company calculates that 30% of pubs will see charges go down, while 70% will stay the same or see an increase. The biggest increases are expected to be around 35%, spread over two years.

There is a discount of 3% for anyone whose food sales account for more than 30% of turnover — the discount rises to as high as 10% for anyone whose food sales are more than 60% of turnover.

It is also offering more value by including a free second viewing card and free HD to pubs — it launched free 3D content earlier this year and almost 2,000 pubs have geared up for it.

Sky is also working on a scheme that will provide extra discounts to pub customers whose rateable value is boosted by accommodation.

Iain Holden, managing director of Sky Business, said: "We want to make our product more affordable and the cost of it fairer.

"We'd like distribution of Sky to grow in the pub sector while the average rate goes down.

"The licensed trade has gone through a number of changes over the last decade and we recognise that it is more diverse industry than ever.

"As a result, we've reviewed our pricing stucture to see if there is a fairer way to reflect these changes.

"After extensive research and consultation we have created a structure which we believe more accurately reflects the value that Sky brings to individual premises."

Holden also hinted that discounts could increase. "We have introduced a discount scheme but it's on the low side and we recognise that."

Sky is also working on creating new "five-day" contracts for pubs that close at weekends and "seasonal contracts" that will see a lower charge during the quieter summer months.

The average pub currently pays £700 a month for its subscription.

Philip Thorley, of Thorley Taverns, estimates the company's annual Sky bill would increase from £200,000 to £230,000 after the changes.

He said: "Nobody is ever happy when fixed costs are heading north. We need to take an extra £90,000 to justify the extra £30,000 cost - I'm struggling to see where that is coming from."

Greene King tenant Richard Vellender will see his Sky rates increase by £400 to £1,300 a month at his pub, where overall turnover varies between about £4,000 and £7,000.

His business rates have gone up from £16,000 to £25,000, although Vellender is contesting the rise.

"It's just not viable," said the licensee of the Swan Hotel in East Ilsley, Berkshire. "We will have to leave it and not have a subscription.

"I would like to know how Sky justifies the increase when in twelve months there has no material change to size of my business premises."