Sky Television plc
|Fate||(Sky Television plc) Massive losses and merged with BSB to become BSkyB|
|Headquarters||London, England, UK|
|Key people||Brian Haynes
|Products||Pay TV services
Sky Television plc was a public limited company which operated its four-channel satellite television service, launched by Rupert Murdoch's News International on 5 February 1989. Sky Television and rival British Satellite Broadcasting were suffering massive losses and entered into a 50:50 financial merger in November 1990 to form British Sky Broadcasting (BSkyB).
Sky Television plc was originally Satellite Television Ltd. (SATV), a consortium originally set up by Brian Haynes in November 1980. Brian Haynes was a former journalist employed at Thames Television. In 1979 he produced a documentary for the TV Eye strand which looked at Ted Turner and his satellite broadcasting operations in the USA, on which the purchase of an Atlanta UHF station in 1970 began the Turner Broadcasting System, which is now an American media conglomerate and subsidiary of Time Warner, managing the collection of cable networks and properties initiated or acquired by Ted Turner starting during the 1970s (Turner Broadcasting System now operates as a semi-autonomous unit of Time Warner) He soon realised the potential of using satellites in providing a new and different kind of television broadcasting. Haynes first advised Thames Television, the Independent Broadcasting Authority and an industry group before setting up SATV.
In October 1981, SATV began test transmissions on the Orbital Test Satellite satellite after the European Space Agency allowed the company to test the satellite for the use of commercial television, with an hour of light entertainment in English each night. While at first the island of Malta was its official target it had a wide, pan-European, footprint. The low-powered satellite forced it, however, to broadcast to cable systems rather than directly to individual satellite dishes, which proved to be a losing proposition.
European satellite television plans started in the late 1960s, when plans were first laid for an experimental satellite. The Orbital Test Satellite was deployed in May 1978 and allowed the necessary testing to allow for Europe's first commercial venture in telecommunications and television. From 1978 to 1981 OTS was successful in illustrating the viability of Ku-Band technology for the continent of Europe. Following the completion of its test programme, excess transponder capacity was leased to SATV. While governments in Britain and other European countries wrestled with the allocation of their channels, Satellite Television pioneered cable and satellite television to provide Europe's first satellite-delivered cable TV service.
Satellite Television/Super Station Europe
Satellite Television (also known as Super Station Europe on screen) began regular transmissions on 26 April 1982, becoming Europe's first ever cable and satellite channel, originally broadcasting from OTS aimed to cable operators all over Europe. Norway and Finland were the first two countries to permit the new service's transmission via cable, followed by Malta and Switzerland, and then West Germany. Originally it did not have a UK broadcasting licence and consequently was in a similar legal situation in the United Kingdom to the pirate radio stations of the 1960s and 1970s, but reception of the OTS satellite in the British Isles required a satellite dish of approximately 10 feet wide, and it was believed that there were fewer than 50 privately owned installations in the UK that would permit direct-to-home (DTH) reception of the service.
Many programmes from the ITV companies' archives appeared on the schedules of the new channel, such as Please, Sir!, Dickens of London, The Rag Trade, Within These Walls and Hadleigh, which in time were accompanied by some limited self-made programming, such as the music show Cable Countdown hosted by BBC Radio 1 DJ Mike Read. Initially, the channel's self-made programming and continuity played out from the Molinare studios at Fouberts Place in the West End of London.
By March 1983 plans were afoot to start broadcasting to the United Kingdom, as a part of its second growth phase, which tried to prove there was a potential audience with the service being technically possible, and to prove the service could make a profit. Nonetheless, at this point the station was struggling financially, due to the limited audience that it was able to reach due to the relatively weak signal of OTS that made DTH reception of the service extremely difficult, and hence having to rely on cable audiences, and even still only in those countries which had legalised the reception via cable systems of the channel; as well as having to cover the high costs of the satellite transmission of the service. By the end of March Rupert Murdoch had shown interest in the project, and he held talks with SATV's owners about buying a substantial equity stake in the company. On 27 June 1983, the shareholders of Satellite Television agreed a £5 million offer to give News International 65% of the company.
Rupert Murdoch described cable and satellite television as being "the most important single advance since Caxton invented the printing press" and saw it as the ideal and definte way into making his definitive breakthrough into the UK's television industry, which he had wanted to do for a long time. Eventually, Murdoch brought the remaining shares of the company, taking full control. During August, Murdoch outlined plans which saw the broadcasting hours extended to 17.50 to 22.30 each day, with a mix of music, sport, news, comedy and films. Plans were also afoot to start broadcasting from the new European communications satellite ECS-1 and addition cable operators, allowing it to increase its audience across Europe and gain access to British viewers. By 16 October 1983, the station finally started broadcasting to the United Kingdom.
On 16 January 1984 the channel was renamed Sky Channel. Rupert Murdoch and Jardin Owens put in new management, expanded its broadcast hours while expanding its programming line up which provide a mix of English-language sports and entertainment shows, including a number of new music programmes with Gary Davies, Linda de Mol, Pat Sharp, David "Kid" Jensen, and Anthea Turner presenting programmes such as Euro Top 40, and UK Top 50 Chart. The new management also adopted a more aggressive policy to reach an increasing number of cable households throughout Europe. Shortly after the channel's relaunch, the first cable system in the UK to incorporate it on a permanent basis was Swindon Cable. In Republic of Ireland, Sky Channel started to become widely available among cable systems in around 1987.
Despite increasing its viewership (from 291,470 in December 1983, to surpassing 4,003,000 in June 1985 before reaching 9,001,905 by April 1987), and Murdoch and Owens' programming changes managing to create a dramatic increase in the channel's viewing figures in those countries with a high penetration of cable television, such as the Benelux and Nordic countries, Sky Channel was still considered to prove less than successful, however, generating under $20 million per year in advertising revenues, and by the mid-1980s Murdoch was already looking to evolve the Sky concept toward the newly emerging direct satellite broadcasting technology and to focus the television subsidiary on the British market. Rather than paying for the rights to beam Sky's single-channel signal to cable providers, which in turn supplied the channel's programming to subscribers, direct satellite broadcasts presented the opportunity of providing multichannel programming directly to subscribers' homes via small satellite dish and decoder packages. In 1984, Sky began negotiations with TDF of France with the view of being able to use the high-powered satellites that TDF was intent on launching so as to use it for DTH penetration across the UK and/or Europe, however, nothing came of those negotiations.
In Britain (where cable television, although already having a notable number of subscribers, had not yet developed as much as in Central and Northern Europe), market research gave it a 13% audience share in cable homes, surpassing both BBC2 and Channel 4 in those homes, with its children's programming (the station's then most successful field) increasing to a share of 22.4% (similar to the programmes seen on both Children's BBC and Children's ITV). Some of Sky's special programmes, mainly WWF wrestling specials, managed to surpass both BBC1 and ITV among cable audiences.
For the entirety of its early life, the channel continued to be a loss-making enterprise, losing £10 million in 1987. However, in contrast to the station's founders, Murdoch had pockets deep enough to sustain the operation. The other main English-language pan-European cable and satellite television channel launched in this period, Super Channel, launched in early 1987 by the majority of the ITV companies also lost a high amount of money as well.
Launch of the Sky Network
Murdoch bid for the satellite broadcasting license in 1986 but lost out to BSB who announced plans to begin broadcasting in mid-1989 with three channels on satellite frequencies legally allotted to the UK by international agreement. Murdoch attempted to join the BSB consortium, but was rejected which spurred him on to set up his own satellite service.
On 8 June 1988, Murdoch announced at a press conference his plans to expand Sky's service to four channels, thus creating the Sky Television network. Sky Channel alongside the other three channels would move to the Astra satellite system (intended for direct-to-home reception), and the new network would centre its operations more specifically to the UK. (Sky had from its initial satellite moved to the ECS-F1 (Eutelsat I-F4) satellite).
By renting space on the Luxembourg-based Astra satellites, Murdoch circumvented British ownership laws, and using the existing PAL broadcast technology, Sky TV began broadcasting four channels of programming on 5 February 1989, including an upgraded version of the original Sky Channel, later renamed Sky One; Eurosport, a joint-venture between the European Broadcast Union and News International; Sky Movies, a fee-based all-film channel; and Sky News, a 24-hour news channel. Start-up costs reached £122 million; losses for its first year of operations were £95 million. Initially, Sky Channel's programming remained much the same (children's programmes, soaps, and US action series), except for a number of new game shows and a few international travel documentaries. Another programme that also came with the relaunch was Sky By Day, Sky TV's variation on ITV's more popular This Morning, hosted by ex-Radio One DJ Tony Blackburn (who had moved to commercial radio by then) and ex-Magpie presenter Jenny Hanley. The show had a mix of entertainment, gossip, fashion, etc. Yet it was noticeably low budget and had a small fan base. Prime-time broadcasts to European cable operators of Sky Channel were replaced by Eurosport, which was the only of Sky's new channels to be officially aimed at a pan-European audience (like Sky Channel had up to then).
During May 1989 Sky prepared to give away set topboxes and dishes to new customers in bid to increase customers, but was not helped when its joint venture with Disney collapsed at the same time. The discussion about the venture had been taking place since November 1988, but Disney felt it was no longer on equal footing on "decision-making responsibility" in 50-50 partnership. Disney was supposed to start up two channels, but when the talks broke down, Sky issued a lawsuit against Disney, claiming £1.5 billion in damages. The suit was later settled with Disney selling its stake in the joint venture back to Sky, and agreeing to licence its movie library for a five-year period.
BSB competition and merger
The impetus for the relaunch as Sky Television was the refusal of the IBA to allow Murdoch to bid for the UK Satellite TV licence won by the British Satellite Broadcasting alliance. This created a battle to win customers in this new multichannel environment. In the end Sky's earlier launch and leasing of transponders on the Astra satellite network allowed it to merge with its rival. In contrast to Sky; BSB suffered from the regulatory burdens of only 5 TV channels, building and launching its own satellites and more ambitious and expensive technology. Also it had higher capital expenditure overall, such as the construction of its Marco Polo House HQ in London compared to Sky's industrial estate in Isleworth although this was not a decisive factor.
In 1990 both companies were beginning to struggle with the burden of massive losses and in November 1990 there was a 50:50 financial merger, with a management takeover by Sky. The new company was called British Sky Broadcasting (BSkyB) but marketed as Sky, Marco Polo House was sold, BSB's channels were largely scrapped in favour of Sky's and the Marcopolo satellites were run down and eventually sold in favour of the Astra system (Marcopolo I in December 1993 to NSAB of Sweden and Marcopolo II in July 1992 to Telenor of Norway, leaving the Squarial obsolete. Both companies had already one HS376 in orbit at the time). The merger may have saved Sky financially; Sky had very few major advertisers to begin with. Acquiring BSB's healthier advertising contracts apparently solved the company's problems.
The early years of the merged BSkyB saw a haemorrhage of cash from News Corporation funds. At this stage of the company's life it was losing millions of pounds a week. To help turn around the financial fortunes of the company, New Zealand television executive Sam Chisholm was brought on board to manage the day-to-day operations and build the subscriber base, and the company moved into profit.
- 1980 – Satellite Television is set up by Brian Haynes, back by backed by Guinness Mahon and Barclays Merchant Bank.
- 1982 – Super Station Europe (SSE) launched
- 1983 – Murdoch's News International takes control of Satellite Television UK (SATV)
- 1984 – Renamed Sky Channel
- 1986 – Granada, Pearson, Virgin and Amstrad form British Satellite Broadcasting (BSB) and win Independent Broadcasting Authority UK satellite franchise
- 1987 – BSB awarded licence from the IBA and complete over £200m funding with additional shareholders Reed, Chargeurs, London Merchant Securities and others
- 1988 – July – Murdoch announces his intention to relaunch Sky Channel as Sky Television on the Astra satellite system
- 1989 – 5 February – Four channel Sky Television package launched
- 1990 – March – BSB begins broadcasts
- 1990 – November – Both companies had suffered heavy losses and a 50:50 financial merger was agreed to form British Sky Broadcasting
- 1990 – BSkyB announces former BSB customers will receive Sky equipment (for Astra system) free of charge, Marcopolo satellite transmissions to cease
- 1992 – July – BSB satellite Marcopolo II sold to Telenor
- 1993 – December – BSB satellite Marcopolo I sold to NSAB
- "From Satellite to Single Market": New Communication Technology and European. Author: Richard Collins Publication Date: 24 Sep 1998 | ISBN 041517970X | ISBN 978-0415179706
- "High Above: The untold story of Astra, Europe's leading satellite company " Author: Chris Forrester ISBN 978-3642120084
- "Satellite television in Western Europe" Volume 1 of Acamedia research monographs, Author: Richard Collins ISBN 0861963881, 9780861963881
- Book: "High Above: The untold story of Astra, Europe's leading satellite company " By Chris Forrester ISBN 978-3642120084
- "New Scientist" Green light for Satellite television Bp 267 By Peter Marsh 21 October 1981
- Book: A concise history of British television 1930–2000, By Tony Currie
- The Guardian Saturday, 9 January 1982, p. 18 "£4m for TV plan"
- Boost for satellite broadcasting. By Bill Johnstone, Electronics Correspondent. The Times, Thursday, 10 March 1983; pg. 3
- Times' owners in talks on satellite TV. By Bill Johnstone Electronics Correspondent. The Times Friday, 25 March 1983
- News International buys 65% of satellite group. By Bill Johnstone, Electronics Correspondent. The Times, Wednesday, 29 June 1983; pg. 13
- Title The franchise affair: creating fortunes and failures in independent televisionAuthors Asa Briggs, Joanna SpicerEdition illustratedPublisher century, 1986Original from the University of MichiganDigitized 9 Oct 2006ISBN 0712612017, 9780712612012
- Satellite Television will be on air 5 hours a night. By Bill Johnstone, Electronics Correspondent. The Times, Friday, 5 August 1983; pg. 3
- TV satellite set for weekend debut. By Bill Johnstone, Electronics Correspondent. The Times, Wednesday, 12 October 1983
- The Guardian Thursday, 9 June 1988, Page: 3 "Murdoch launches war in the air"
- "Number 2043". SWEDEN CALLING DXERS. 16 May 1989.