British Satellite Broadcasting and the UK Television Market

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A large satellite dish on top of a building
Credit: pexels.com, A large satellite dish on top of a building

British Satellite Broadcasting (BSB) was a major player in the UK television market, launching in 1986 as a competitor to the BBC and ITV. It operated two channels, Sky Channel and Eurosport.

The UK television market was dominated by the BBC and ITV at the time, but BSB aimed to shake things up with its innovative approach. BSB's channels offered a mix of entertainment, sports, and music programming.

BSB's Sky Channel was a general entertainment channel that broadcast a wide range of shows, including movies, documentaries, and children's programming. Eurosport, on the other hand, was a sports channel that focused on live coverage of international sports events.

The launch of BSB's channels marked a significant shift in the UK television market, providing consumers with more choice and variety.

Development and Preparations

In January 1977, the World Administrative Radio Conference assigned each country five high-powered direct broadcast by satellite channels for domestic use.

The BBC was awarded two of these channels and proposed its own satellite service in 1982, but the government imposed two conditions. The BBC had to use a satellite built by United Satellite, a consortium of British Aerospace and Matra Marconi Space, at a cost of £24 million per year.

Credit: youtube.com, Square Peg: the Dream of British Satellite Broadcasting - Episode One

The government also required the BBC to borrow up to £225 million to cover the cost of the project, as it was not allowed to use public funds or existing sources of revenue.

The cost of Unisat was later found to be greatly underestimated, and the government allowed the Independent Broadcasting Authority (IBA) to bring in private companies to help cover the costs, forming the "Club of 21". Here's a breakdown of the consortium's ownership:

However, the consortium eventually concluded that the cost of setting up the satellite system was not justifiable, and the project failed in 1985.

Preparations for Launch

The preparations for launch were a crucial part of British Satellite Broadcasting's (BSB) development. BSB was a television company that provided direct broadcast satellite television services to the United Kingdom.

The company was headquartered in London and was merged with Sky Television plc in November 1990 to form British Sky Broadcasting (BSkyB). BSB started broadcasting on 25 March 1990, six months later than initially planned.

Back view of broadcast editors working at panel with equipment and big monitors
Credit: pexels.com, Back view of broadcast editors working at panel with equipment and big monitors

BSB's initial launch was delayed due to problems with the supply of receiving equipment. The company wanted to avoid Sky's experience of launching when most shops had no equipment to sell.

BSB's D-MAC receivers were more expensive than Sky's PAL equivalents and incompatible with them. This made it difficult for consumers to switch between the two services.

BSB's service was launched with a slogan of "It's Smart to be Square" and was initially available on five satellite channels for the general public, plus a sixth for business users.

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Development

In January 1977, the World Administrative Radio Conference assigned each country five high-powered direct broadcast by satellite channels for domestic use. The BBC proposed its own satellite service in 1982, but the government imposed two conditions.

The first condition was that the BBC had to use a satellite built by United Satellite, a consortium of British Aerospace and Matra Marconi Space (now Airbus Defense and Space), with costs estimated at £24 million per year. The second condition was that the BBC could not use public funds or existing sources of revenue to fund the project.

A busy urban street scene featuring a large satellite dish, cars, and pedestrians.
Credit: pexels.com, A busy urban street scene featuring a large satellite dish, cars, and pedestrians.

A supplementary charter was agreed in May 1983, allowing the BBC to borrow up to £225 million to cover the cost of the project. This was a significant amount, and it's no wonder that the cost of Unisat was found to be greatly underestimated.

The new Home Secretary announced in Autumn 1983 that the three remaining channels would be given to the Independent Broadcasting Authority (IBA) to allow the private sector to compete against the BBC in satellite broadcasting. This was a significant shift in plans.

The BBC started talking with the IBA about a joint project to help cover the cost, and the government allowed the IBA to bring in private companies to help cover the costs, known as the "Club of 21". Here's a breakdown of the consortium:

  • BBC – 50%
  • ITV franchises – 30%
  • Virgin/Thorn EMI/Granada TV Rental/Pearson Longman and Consolidated Satellite Broadcasting – 20%

The consortium initially planned to launch the service in 1986, but this date was later delayed to 1989. They also asked the government to allow them to tender out the building of the new satellite system to help reduce cost.

Bsb Datavision

Men in British Military Costumes Sitting by the Table
Credit: pexels.com, Men in British Military Costumes Sitting by the Table

BSB Datavision was a subsidiary of the company that offered encrypted television services and data reception to business users through BSB's domestic TV receivers.

The Computer Channel was one of the services offered by BSB Datavision.

BSB Datavision was launched along with the channels for the general public, but it catered to a different audience.

Most BSB staff were made redundant when the Marco Polo House headquarters were vacated.

A few BSB staff moved to work at Sky's HQ in Isleworth.

The BSB building was retained by the new company, and it became the home of shopping channel QVC in 1993.

ITV Digital moved into part of the building in the early 1990s.

Marco Polo House was demolished in March 2014.

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Launch and Channels

British Satellite Broadcasting (BSB) was a television company that provided direct broadcast satellite television services to the United Kingdom.

BSB launched its service on 26 March 1990, six months late, with the slogan It's Smart to be Square, and its five satellite channels for the general public included a sixth for business users.

Credit: youtube.com, BSB British Satellite Broadcasting Launch Ad - Rare - British Television

The company's D-MAC receivers were more expensive than Sky's PAL equivalents and incompatible with them, which caused initial problems with the supply of receiving equipment.

BSB claimed to have around 750,000 subscriptions while Sky had extended its reach into more than 1.5 million homes, but both companies were hemorrhaging badly.

BSB and Sky were bitter rivals for the home satellite market, and their competition was fierce, with both companies racing to reach the three million household subscription milestone.

BSkyB, the merged company, moved quickly to rationalise the combined channels, rebranding some of them to create a more streamlined service.

The Movie Channel kept its name until 1997 and was briefly rebranded as Sky Movies Screen 2, while The Sports Channel retained its name for a while before being rebranded to Sky Sports in April 1991.

BSkyB and Merger

In November 1990, a 50:50 merger was announced between British Satellite Broadcasting and Sky Television to form British Sky Broadcasting (BSkyB), later marketed as Sky.

Credit: youtube.com, BBC Newsnight - Sky/BSB Merger Report - 1990

This merger brought together two struggling companies with huge losses, rapidly increasing debts, and ongoing startup costs.

The merger helped to solve Sky's problems by acquiring BSB's healthier advertising contracts and equipment.

The combined company had very few major advertisers at the time, but acquiring BSB's contracts helped to improve this situation.

The merger may have saved Sky financially, as it was able to benefit from BSB's more stable financial position.

Regulatory and Competition

The regulatory landscape was a significant factor in the success of British Satellite Broadcasting. The EU adopted Multiplexed Analogue Components (MAC) as the standard for direct broadcast satellites, which gave European TV manufacturers a patent advantage.

This meant that non-European manufacturers had to pay royalties and couldn't access the technology directly, putting them at a disadvantage. The Independent Broadcasting Authority developed a variant of MAC called D-MAC, which had marginal audio channel improvements.

The IBA insisted on using D-MAC for the satellite service it licensed, and it became a member of the "MAC Club" of European organisations that owned patents on MAC variants. This move was ironic, as it ultimately led to the downfall of BSB and the dominance of Sky.

The IBA's inability to regulate the market effectively allowed Rupert Murdoch's Sky to launch with free-to-air PAL receivers, which were cheaper and more compatible with existing technology. This gave Sky a significant advantage over BSB, which used the more expensive and incompatible D-MAC receivers.

Regulatory Context

Credit: youtube.com, Competition and Regulatory Law

The regulatory context of the UK's satellite TV industry was a complex web of patents, royalties, and technological standards. A new TV transmission system, MAC, was developed for high definition TV but was later adopted as the standard for all direct broadcast satellites in the EU, giving European manufacturers a significant advantage.

This had the effect of limiting access to the technology for non-European manufacturers, who would have to pay royalties to the EU manufacturers. The UK's Independent Broadcasting Authority developed a variant of MAC, D-MAC, which had marginal audio channel improvements.

The IBA insisted on using D-MAC for the satellite service to be licensed by itself, while satellite TV manufacturers on the continent of Europe standardised on another variant, D2-MAC. D2-MAC used less bandwidth and was compatible with existing European cable systems.

The IBA became a member of the secret "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", which allowed the free market to leverage the benefits of lower cost PAL transmissions with pre-existing set-top box technology.

Competition

Credit: youtube.com, Competition Policy Explained

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 launched its 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.

BSB's 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.

BSkyB and Merger

Credit: youtube.com, Sky News - B - Sky/BSB Merger Report - 1990

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 helped to solve Sky's financial problems by acquiring BSB's healthier advertising contracts and equipment.

Sky had very few major advertisers at the time, which made acquiring BSB's advertising contracts a significant advantage.

The merger may have saved Sky financially by combining their resources and expertise.

BSkyB and Merger

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 helped to solve Sky's problems by acquiring BSB's healthier advertising contracts and equipment.

Sky had very few major advertisers at the time, making it difficult for the company to stay afloat financially.

The merger may have saved Sky financially, giving it the boost it needed to recover from huge losses and rapidly increasing debts.

The new company, operating as Sky, was formed to take advantage of BSB's healthier financial situation.

British Satellite Broadcasting

Credit: youtube.com, British Satellite Broadcasting (BSB) Galaxy Channel Ident - 4k - 1990

British Satellite Broadcasting was a satellite station established in April 1986, and to receive its signals, subscribers were supplied with a non-circular antenna known as "squarials".

The station had a notable run of Doctor Who episodes, airing a selection of William Hartnell season one and two serials on its Galaxy Channel starting from April 1, 1990.

A total of 46 episodes were shown, with each Sunday episode repeated the following Saturday. This run temporarily ended on September 8, 1990.

Several Target novelisations from 1990 referenced BSB on the back cover, mentioning the station's airing of Doctor Who episodes.

The station also hosted a special Doctor Who Weekend on September 22-23, 1990, featuring screenings of complete Hartnell, Troughton, and Pertwee stories, as well as documentaries and interviews with cast and crew.

A full-page ad for the Doctor Who Weekend appeared in the Radio Times on September 22-28, 1990.

BSB was acquired by and merged with SKY on November 2, 1990, and re-branded as BSkyB.

Thomas Goodwin

Lead Writer

Thomas Goodwin is a seasoned writer with a passion for exploring the intersection of technology and business. With a keen eye for detail and a knack for simplifying complex concepts, he has established himself as a trusted voice in the tech industry. Thomas's writing portfolio spans a range of topics, including Azure Virtual Desktop and Cloud Computing Costs.

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