BSkyB reported a surge in new subscribers to its direct-tohome services in the early months of this year alongside bumper third-quarter profits.
Some 308,000 subscribers were recruited during the three months to March. Allowing for existing subscribers who did not renew their contracts, that raised the total by 95,000 to over 7.7 million.
Profits, excluding goodwill and exceptional items, rose to £ 209 million from £135 million in the same months last year. Revenues climbed by nine per cent to £1.02 billion.
On the stock market, the shares see-sawed before finishing 2p lower 531p after analysts voiced concerns about higher marketing costs and "churn", the percentage of customers who left Sky during the quarter. This rose to 11.1 per cent from 9.5 per cent in the fourth quarter of last year.
Sky, which has launched an aggressive marketing campaign to drive chief executive James Murdoch's growth strategy, said marketing costs increased more than four-fold to £379 million, or 13 per cent of revenue.
Some investors and analysts have expressed worries that BSkyB may pay too much to win new subscribers. Mr Murdoch is the son of Rupert Murdoch, whose News Corporation conglomerate owns more than a third of BSkyB.
"There were very good net addition numbers but there will be concerns about the increase in churn, and the marketing numbers were higher than expected," Numis analyst Paul Richards said.
Sky said it is on track to reach eight million subscribers by the end of this year.
BSkyB's dominance of the UK multi-channel TV market faces a challenge from the subscription-free Freeview platform, which now has nearly five million subscribers, as well as from the resurgent cable companies NTL and Telewest.
Mr Murdoch said his target was still to keep the rate of "churn" at ten per cent.
The average revenue Sky receives per subscriber fell by £4 to £382 in the latest quarter. Numis estimates the average cost of acquiring a new subscriber rose to £250 in the third quarter from £230 leading up to Christmas.