British Sky Broadcasting Group Plc, buoyed up by record profits and a huge increase in revenue, is confident that it will be operating a digital TV service by next spring and will have an interactive system – offering limited internet access to popular web sites chosen by Sky – by the summer. But the shares crashed 39p to 431p on fears that future profits could be hit by increased programming and marketing costs for digital TV. Revenue for the year to June 30 shot up 25% to 1.27bn pounds and net profits are up 22.4% to 288m pounds. With 5.9 million Sky subscribers – equivalent to one in four homes in the UK – the company is well placed to take advantage of the digital revolution and has placed orders for one million set-top boxes. With Sky bosses bristling hostility to Microsoft Corp’s hopes of providing a Windows interface to televisions (CI No 3,226), it has a massive advantage in the UK by virtue of its market share – provided industry watchdog Oftel does not veto its plan to subsidize the set-tops by around 200 pounds each.
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