A fall in operating profits for the first nine months of Sky's financial year overshadowed a rise in revenues, the company said in an earnings statement, as it announced also a tie-up with Game of Thrones maker HBO regarding new television drama series. Sky is under increasing pressure from pay TV rivals over the premium sports rights, particularly BT in the UK.
Revenue climbed to GBP9.64 billion from GBP9.15 billion, as core subscription revenue grew by 4% to GBP8.13 billion.
Sky has said rising costs from screening Premier League football and a "weaker United Kingdom advertising market" has dragged on profits.
It said it had made significant inroads on reducing operating costs, which was necessary due to "significantly higher programming costs".
That revenue growth couldn't keep up with the higher expenditure though, with total costs rising by 8% to £8.63bn.
Despite the decline in profit, chief executive Jeremy Darroch said Sky is "on track" financially.
Revenues for the nine months were up by 11 per cent with strong profit growth of £64 million in Italy and £43 million in Germany and Austria.
It expects to greenlight at least two drama projects per year, with the first project coming to screen in 2018.
"This new venture deepens that relationship, maintains our leadership position in world-class content, provides great opportunities for indies and gives our customers even more opportunity to enjoy brilliant storytelling".
Sky also singled out the growing popularity of Sky Q as a highlight of 2017 thus far, as it is now in one million customers' homes, along with the launch of Sky Mobile.
The news comes days after Sky launched its buzzy miniseries Guerrilla across Europe.
HBO' chairman and CEO Richard Plepler said the two companies "have a long tradition in creating superior content for our customers".
21st Century Fox owns a 39 percent stake in Sky, led by CEO, and has offered to take full ownership. "Despite the broader consumer environment remaining uncertain, we continue to deliver on our strategy and are on track for the full year", Darroch said.