British Satellite Broadcasting

British Satellite Broadcasting plc

Industry	Media
Founded	1986
Defunct	December 1990, merged with Sky Television to form British Sky Broadcasting
Headquarters	London, England, UK
Key people	Unknown
Products	Pay TV services Programming
Revenue	Unknown
Operating income	Unknown
Net income	Unknown

British Satellite Broadcasting (BSB) was a British television company which provided direct broadcast satellite television services to the United Kingdom. The company was merged with Sky Television plc in November 1990 to form British Sky Broadcasting (BSkyB).

Background

The British Satellite Broadcasting consortium was formed in 1986 by Granada Television, Pearson, Virgin, Anglia Television and Amstrad. In early 1988, the BSB consortium was awarded a licence to operate three channels by the Independent Broadcasting Authority (IBA). Around the time of the licence award, Amstrad withdrew its backing and Australian businessman Alan Bond joined the consortium along with Reed International, Chargeurs, Next plc and London Merchant Securities amongst others.

Rival tycoon Rupert Murdoch, having failed to gain regulatory approval for his own satellite service, announced in July 1988 that his pan-European television station, Sky Channel, would be relaunched as a four channel UK-based service, Sky Television. The BBC had previously proposed its own satellite service, but pulled out when the government insisted that the BBC should pay for the satellite's construction and launch. In addition to BSB's three channels, licences for two more channels would be put out to tender.

The stage was set for a dramatic confrontation. BSB, anticipated as the UK's only satellite service, was faced with an aggressive drive by Murdoch's Sky to be the first service to launch.

BSB's Five Channels: The Sports Channel, Galaxy, The Movie Channel, Power Station, Now

Evolution of UK satellite television

A Squarial installed on a house wall

BSB TV Month promotional magazine, first issue

BSB was forced by the conditions of its licence to pay for the construction and launch of two satellites, named Marcopolo 1 and 2 after the explorer Marco Polo, capable of broadcasting five channels that could be received on 30cm (12") diameter dishes. The satellites were high powered versions of Hughes Space and Communications' HS376 satellites. As Britain's official satellite television provider, BSB had high hopes. The company planned to provide a mixture of highbrow programming and popular entertainment, from arts and opera to blockbuster movies and music videos. The service would also be technically superior, broadcasting in the D-MAC (Multiplexed Analogue Components type D) system dictated by European Union regulations with potentially superior picture sharpness, digital stereo sound and the potential to show widescreen programming, rather than the existing PAL system.

In contrast to the ambitious and costly technology required by BSB in accordance with its IBA licence, Sky chose to use the European Astra satellite and broadcast in PAL with analogue sound; this system would require 60cm (24") dishes, although 80cm versions were recommended for Scotland and parts of the north of England. BSB criticised Sky's proposals, claiming that the PAL pictures would be too degraded by satellite transmission, and that in any case, BSB would broadcast superior programming. SES had no regulatory permission to broadcast, had plans (initially) for only one satellite with no backup and the European satellite launch vehicle Ariane suffered repeated failures. However SES used the resulting delay time to re-engineer the satellite to reduce the dish size needed which would otherwise have been larger than 60cm (24").

To distance itself from Sky and its dish antennas, BSB announced a new type of flat-plate satellite antenna called a "Squarial" (i.e., "square aerial"). The illustrative model Squarial shown to the press was a dummy and BSB commissioned a working version which was under 45cm (18") wide. A conventional dish of the same diameter was also available. The company had serious technical problems with the development of ITT's D-MAC silicon chips needed for its MAC receivers. BSB was still hoping to launch that September, but eventually had to admit that the launch would be delayed. In the event, Sky Television began its four-channel service of general entertainment (Sky Channel), movies (Sky Movies), sport (Eurosport) and rolling news (Sky News) on 5 February 1989.

Meanwhile, since no other consortium had come forward to bid for the two spare channel licences, BSB now had a licence to operate five channels rather than just three. The company continued to promote its Squarial with the slogan It's Smart to be Square.

BSB's five satellite channels were:

• The Movie Channel
• The Sports Channel
• Galaxy
• The Power Station
• Now

Competition

Sky's head start over BSB proved that the PAL system would give adequate picture quality and that many viewers would be happy to watch Sky's more populist output as opposed to waiting for the promised quality programming pledged by BSB. Sky had also launched their multi-channel service from studios at an industrial estate in Isleworth, west London with a 10-year lease on SES transponders for an estimated £50 million without backup. BSB, on the other hand, would operate from more expansive headquarters at Marco Polo House in Battersea, south London with construction and launch of its own satellites costing an estimated £200 million.

When BSB finally went on air in March 1990, 13 months after Sky, the company's technical problems were resolved and its programming was critically acclaimed. However its D-MAC receivers were more expensive than Sky's PAL equivalents and incompatible with them. Many potential customers compared the competition between the rival satellite companies to the format war between VHS and Betamax home video recorders and chose to wait and see which company would win outright as opposed to buying potentially obsolete equipment.

Merger

In October 1990, an enterprising manufacturer came up with a dual satellite dish that could be used to receive both Sky and BSB services, although separate receivers would still be required - the following month this technology became effectively obsolete.

Both companies had begun to struggle with the burden of huge losses, escalating debts and ongoing startup costs. In November 1990, a 50:50 merger was announced to form a single company, operating as British Sky Broadcasting (BSkyB), but marketed as Sky. The merger may have saved Sky financially as it had very few major advertisers at the time, so acquiring BSB's healthier advertising contracts and equipment helped to solve the company's problems^{[citation needed]}.

Satellites

As the company focused on the Astra system, which was not subject to IBA regulation, the Marcopolo satellites were withdrawn and eventually sold (Marcopolo I in December 1993 to NSAB of Sweden and Marcopolo II in July 1992 to Telenor of Norway). Sky News began broadcasting services to Scandinavia from the Thor satellites.

NSAB operated Marcopolo I (as Sirius 1) until successfully sending it to a safe disposal orbit in 2003 as it reached the normal end of its operational life when fuel ran out, also Marcopolo II was operated (as Thor 1) until 2002 and disposed of successfully.

After the merger BSB DMAC receivers were sold off cheaply and some enthusiasts modified them to allow reception of D2MAC services available on other satellites. BSB receivers, Ferguson in particular, could be modified by replacing a microprocessor. Upgrade kits from companies such as Trac Satellite allowed retuning whilst other kits allowed fully working menu systems and decoding of 'soft' encrypted channels, although this required the receiver to have one of the later MAC chipsets. Some kits even included smart card readers and full D2MAC decoding capability.

Locations

The Marco Polo House headquarters were vacated, leading to redundancy for most BSB staff with only a few moving to work at Sky's HQ in Isleworth. The BSB building was retained by the new company, and in 1993 became the home of shopping channel QVC when its UK channel launched. Broadcasting platform ITV Digital moved into part of the building as part of the settlement that saw Sky forced out of the original company.

Channels

Following the takeover, Sky moved quickly to rationalise the combined channels it now owned:

• The entertainment channel Galaxy was closed with its transponders handed over to Sky One.
• The factual, lifestyle and arts channel Now was replaced in the most part with Sky News, although as some arts programming was still to be shown, a short term opt-out service called Sky Arts was launched for broadcast on the Marco Polo transponders at weekends.
• Unlike Galaxy and Now, music channel The Power Station remained on air until 8 April 1991 and was replaced by Sky Movies.
• The Movie Channel and The Sports Channel remained on air.

Technically, two BSB channels still exist, but cannot be rationalised. The Movie Channel kept its name until 1997, being briefly rebranded as "Sky Movies Screen 2", Sky MovieMax and then Sky Movies 2. The channel is now Sky Movies Showcase. The Sports Channel retained its name for a while, then was rebranded to Sky Sports in April 1991, and rebranded to its current name, Sky Sports 1, in 1996, when Sky Sports 3 was launched.

Regulatory context

A new TV transmission system, Multiplexed Analogue Components (MAC), was originally developed for high definition TV but European TV manufacturers developed patented variants and successfully lobbied regulators such that it was adopted by the EU as the standard for all direct broadcast satellites.

This had the effect that the low cost non-European TV manufacturers would not only have to pay royalties to the EU manufacturers but would also not have direct access to the technology and hence would always be behind with new developments.

In the UK, the Independent Broadcasting Authority developed a variant D-MAC which had marginal audio channel improvements, and insisted on its use by the satellite service to be licensed by itself. On the continent of Europe, satellite TV manufacturers standardised on another variant, D2-MAC, which used less bandwidth and was compatible with the extensive existing European cable systems.

With the launch of BSB the IBA became a member of the secret^{[citation needed]} "MAC Club" of European organisations which owned patents on MAC variants and had a royalty sharing agreement for all TV and set top boxes sold.

The IBA was not directed to be an "economic regulator", so the free market in lower power satellite bandwidth satellites (such as SES-ASTRA) leveraged the benefits of the existing lower cost PAL transmissions with pre-existing set-top box technology. The IBA was rendered helpless and Rupert Murdoch made a voluntary agreement to adhere to those Broadcasting Standards Commission rules relating to non-economic matters, such as the technology used.

Ironically the past-deadline encryption system in the DMAC silicon chip technology was one primary reason for BSB having to merge with Sky and hence the Far Eastern TV manufacturers had largely unfettered access to the market when MAC was dropped in favour of PAL. Sky launched with these free-to-air PAL receivers, adding the VideoCrypt technology when the DMAC system was dropped and Sky Sports and Sky Multichannels was launched.

BSB's shareholders and News International (Murdoch) all made huge profits on their investments, the 50:50 merged venture had an effective multi channel quasi monopoly on UK satellite pay TV.

From a UK perspective British Satellite Broadcasting's existence prevented 100% of these profits being made by News International, reducing Murdoch's ability to influence government policy.

At one stage of the saga, News International was facing dismemberment at the hands of its bankers.

External links

• "BSB and Squarials". http://www.colin99.co.uk/bsb.html. Retrieved 30 April 2007. 
• "BSB Promo Video clip - Orbitalzone.Com". http://www.orbitalzone.com/videoclips.htm. Retrieved 29 May 2007. 
• "TVARK - British Satellite Broadcasting". http://www2.tv-ark.org.uk/skytv/bsb.html. Retrieved 17 August 2007. 

References

• New York Times 20 December 1990 Murdoch's Time of Reckoning
• Peter Chippindale, Suzanne Franks and Roma Felstein, Dished!: Rise and Fall of British Satellite Broadcasting,(London: Simon & Schuster Ltd, 1991).