British Sky Broadcasting

From Wikipedia, the free encyclopedia

The neutrality of this article is disputed. Please see the discussion on the talk page.

British Sky Broadcasting Group plc
Type	Public (LSE: BSY)
Founded	1990; BSB 1986 and Sky 1989
Headquarters	Isleworth, London
Key people	Rupert Murdoch (Chairman) James Murdoch (CEO)
Industry	Media
Products	Pay TV services Programming
Revenue	£4,148 million (2006)
Operating income	£798 million (2006)
Net income	£551 million (2006)
Employees	16,000
Slogan	Join In
Website	www.sky.com/corporate

British Sky Broadcasting (BSkyB — formerly two companies, Sky Television and BSB) is a company that operates Sky Digital, the most popular subscription television service in the UK and the Republic of Ireland. It also produces TV content, and owns several TV channels. More than a third of the equity is owned by News Corporation, an American and Australian company chaired by Rupert Murdoch, who also acts as Chairman of BSkyB. (News Corporation's precise shareholding fluctuates due to share options and buy backs and was 39% at February 2007).^[1] For the year to 30 June 2006 BSkyB had turnover of £4.148 billion, and made a profit of £798 million before tax and £551 million after tax. As of 30 June 2006 it had 8,176,000^[2] direct to home customers in the UK and Ireland. However, this figure also includes all those who subscribe to "Sky By Wire" IPTV services such as Homechoice. As of the same date it also had 3,294,000 indirect customers through the cable operator Virgin Media in the UK, and a further 604,000 indirect cable customers on NTL Ireland and Chorus in the Republic of Ireland.

Contents 1 Corporate information 1.1 Management 1.2 Organisation 1.2.1 Direct subsidiaries 1.2.2 Joint ventures 1.2.3 Others 1.3 Financial Performance 1.4 Locations 2 Competition 2.1 Virgin Media 2.2 Television over ADSL services 2.3 Digital Terrestrial Television 3 History 3.1 Origins 3.2 Early years 3.3 Move to Digital 3.4 Timeline 4 Future 4.1 EPG 4.2 On Demand services 4.3 High Definition TV (HDTV) 5 Football rights 6 Set Top Boxes and conditional access 7 Television channels operated by BSkyB 8 See also 9 References 10 External links

[edit] Corporate information

[edit] Management

Rupert Murdoch's News International (a wholly owned subsidiary of News Corporation) currently has a 38% stake in the company. News Corp also fully owns Sky Italia and about 78% of New Zealand's SKY Network Television Limited.

The first CEO of BSkyB was Sam Chisholm, who was CEO of Sky TV before the merger. Chisholm served in this position until 1997. He was followed by Mark Booth who was credited with leading the company through the introduction of Sky Digital. Tony Ball was appointed in 1999 and completed the company's analogue to digital conversion. He is also credited with returning the company to profit and bringing subscriber numbers to new heights. In 2003 Ball announced his resignation and James Murdoch, son of Rupert Murdoch was announced as his successor. This appointment caused allegations of nepotism from shareholders.^[3]

[edit] Organisation

[edit] Direct subsidiaries

• British Sky Broadcasting Ltd.
  Operating company for the Sky pay-television service.
• Sky Television Ltd.
  The original Sky Television plc, now a holding company
• Sports Internet Group Ltd.
  Sports content and online betting services.
• British Interactive Broadcasting Holdings Ltd.
  Interactive television services, formerly an alliance of BSkyB, BT Group, HSBC and Matsushita.
• Easynet Ltd.
  Network infrastructure for Sky Broadband, UK Online, and third party corporate customers.
• Mykindaplace.com.
  Being both an agency and a media owner, run many successful sites.
• Aura Sports Ltd
  Media Sales Agency, sells advertising on the majority of premiership football club websites,as well as well as other major sports.
• Aura Play Ltd
  Another Media Sales Agency, sells advertising across a number of websites in the music and entertainment sector.

[edit] Joint ventures

• Nickelodeon UK (and related channels) (50%)
• The History Channel (UK) (and related channels) (50%)
• Paramount Comedy 1 & 2 (UK) (25%)
• Australian News Channel Pty Limited (33.3%) Operates Sky News Australia with PBL and Seven Network)
• MUTV Limited (33.3%)
• National Geographic Channel (50%)
• Music Choice Europe plc (38.8%)
• Attheraces Holdings Limited (50%)

[edit] Others

Other subsidiaries include Sky In-Home Service Ltd which installs Sky equipment, and the Luxembourg based British Sky Broadcasting SA which is the company which leases transponders on Astra satellites.

[edit] Financial Performance

Year ended	Turnover (£m)	Profit/(loss) before tax (£m)	Net profit/ (loss)(£m)
30 June 2006	4,148	798	551
30 June 2005	4,048	631	425
30 June 2004	3,656	480	322
30 June 2003	3,186	128	190
30 June 2002	2,776	(1,276)	(1,383)
30 June 2001	2,306	(515)	(539)
30 June 2000	1,847	(263)	(272)
30 June 1999	1,545	(389)	(285)
30 June 1998	1,434	271	249
30 June 1997	1,270	314	288

[edit] Locations

The main headquarters are in Isleworth, London. Sky originated material is uplinked to the satellite from Chilworth, outside Southampton (and from the BT owned Madley and London Teleport earthstations).

The largest concentration of Sky staff in the UK is in Scotland; the main areas being in Livingston and Dunfermline. These house Sky's contact centres as well as the IT departments and Field Operations.

[edit] Competition

The Ofcom Consumer Panel complained that the BskyB plan to operate pay TV services on Freeview was "generating serious consumer detriment"^[4] and the National Consumer Council call the BSkyB plan "bad news for consumers"^[5], combined with representations from BT, Setanta, Top Up TV, and Virgin Media has caused Ofcom to launch an investigation into the "features of the [UK pay TV] market, including control over content, ownership of distribution platforms, retail subscriber bases and vertical integration" ^[6]

[edit] Virgin Media

At present the other major pay-TV operator in the United Kingdom is the service provider Virgin Media (Rebranded in 2007 from NTL:Telewest). Virgin Media's cable network was also formed by numerous mergers and acquisitions over the last decade, with different cable companies having used different types of network and technology in their areas. This has made it difficult for the company to roll out new services across the UK quickly.

Virgin Media includes the Virgin Media Television production company which owns several channels, including a 50% stake in the UKTV network. The company's cable television service used to carry the majority of BSkyB's channels, making it one of BSkyB's most important customers as well as its biggest rival, however on February 28, 2007 BSkyB stopped offering their channel to Virgin Media Customers.

Virgin Media competes with Sky on price, and is able to differentiate itself from Sky through its ability to offer bundles of services such as Internet access and telephone service. Following NTL's purchase of Virgin Mobile in 2006, Virgin Media also offers a mobile telephone service.

Like Sky, Virgin Media offers High Definition Television (HDTV) services. However, the number of channels available is limited by BSkyB's refusal to allow the HDTV channels it owns to be broadcast by other companies. This situation is somewhat addressed, however, by the fact that Virgin can provide HDTV content using its Video on Demand services and the fact that the V+ HDTV-supplying box can upscale all of its received transmissions to near-HDTV quality.

On 1 March 2007, BSkyB removed its basic Sky channels from the Virgin Media service after requesting Virgin pay the company £35,000,000, for the rights to show the channels, in what has been seen as an effort to move existing Virgin media customers to Sky. Virgin have refused outright to pay the sum, and, in a press release on Virgin Media's website, have said they will continue to "stand-up for the consumer" against, what has been seen, by all non-Murdoch owned British press, as "playground bully tactics". Recent print advertising for Sky however claims that Virgin media 'doubted the value' of the channels concerned, and implies the decision to drop the channels was that of Virgin Media.

However, others argue that, as Sky were directly responsible for the birth of multi-channel television in the UK and that they were the ones who invested heavily in the early days of the market, they must recoup that in the fees they charge for their services. The dispute (as of 6 March 2007) has yet to be resolved. Also on this day, Sky launched a radio advert saying "We have 68% more in programming, and for Virgin Media customers [who don't carry Sky One, Travel, Sports News and Sky news] can switch back for all your favourite shows, including The Simpson's and Lost, as we will be running catch up weekends."

[edit] Television over ADSL services

Sky is facing increased competition from telecommunications providers delivering pay television services over existing telephone lines using ADSL. Such providers are potentially able to offer "triple-play" or "quad-play" packages combining land-line telephone, broadband Internet, mobile telephone and pay television services.

In the final quarter of 2006, BT, the UK's biggest Telephone company, launched BT Vision. The BT Vision set-top box, provides true Video on Demand (VoD) over BT's telephone lines using ADSL. The set-top-box complements the VoD component by providing access to the Freeview digital terrestrial television service. It is expected that before the end of 2007, Virgin Media and Homechoice will have rolled out similar services to parts of the country not currently served by their cable networks. Additionally, Orange are also planning such a service.

To compete with these providers, in October 2005, BSkyB bought the broadband Internet Service Provider Easynet for £211 million. This acquisition has allowed BSkyB to recently start offering its "Sky Anytime on PC" service as well as a "triple play" package combining satellite television, land-line telephone and Broadband service.

[edit] Digital Terrestrial Television

BSkyB initially faced competition from the ONdigital digital terrestrial television service (later renamed ITV Digital). ITV Digital failed for numerous reasons, including, but not limited to numerous administrative and technical failures, nervous investors after a large down-turn in the advertising market and the dot com crash, and BSkyB's aggressive marketing and domination of premium sporting rights.

Sky was more receptive to ITV Digital's FTA replacement, Freeview, in which it holds an equal stake with the BBC, ITV, Channel 4 and National Grid Wireless. At the time of writing, three BSkyB channels are available on this platform: Sky News, Sky Three, and Sky Sports News. Initially BSkyB provided Sky Travel to the service. However, this was replaced by Sky Three on 31 October 2005, allowing BSkyB to air its exclusive licensed content with delays of between 12-18 months from their original air dates on Sky One.

Terrestrial television companies currently have limited bandwidth. This means that, at present, there is little or no option to offer HD services, until after the final analogue television services are switched off in 2012 freeing up substantial bandwidth.

In a response to the push towards Free to Air services such as FreeSat and Freeview, BSkyB has marketed its own free to view offering (Freesat from Sky).

On February 8, 2007, Sky announced its intention to replace its three free-to-air digital terrestrial channels with four subscription channels. It was proposed that these channels would offer a range of content from the Sky portfolio including sport (including English Premiership Football), movies, entertainment and news.^[7] The announcement came a day after Setanta Sports confirmed that it would launch in March as a subscription service on the digital terrestrial platform, and on the same day that NTL's services rebranded as Virgin Media. However, industry sources believe Sky will be forced to shelve plans to withdraw its channels from Freeview and replace them with subscription channels, due to possible lost advertising revenue.^[8]

[edit] History

The Astra satellite network began with the launch of Astra 1A in 1989. With the launch of more Astra satellites from 1991 onward BSkyB was able to begin expanding its services (the Astra satellites were all orbitally co-located so that they could be received using the same dish).

Sky does not own any of the satellites it has used since withdrawing service from the Marcopolo craft; the Astra satellites are owned and operated by SES Astra and Eurobird 1 by Eutelsat. Sky has shared its orbital position with other pay-TV systems in the past.

[edit] Origins

Further information: Sky Television plc and British Satellite Broadcasting

[edit] Early years

By 1990 both Rupert Murdoch's Sky Television and the BSB alliance were beginning to struggle with the burden of massive losses. The collapse of BSB in November 1990 led to a merger, which was in effect a takeover by Sky — quality programming and superior technical quality had been no match for shrewd, aggressive marketing and pragmatic capital expenditure.

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 Marco Polo 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. Both companies had already one HS376 in orbit at the time). The merger may have saved Sky financially; despite its popularity, Sky had very few major advertisers to begin with. Acquiring BSB's healthier advertising contracts and equipment apparently solved the company's problems.

[edit] Move to Digital

The launch of the first Astra 2 series satellite at a new orbital position, 28.2° east, in 1997 (followed by more Astra satellites as well as Eutelsat's Eurobird 1 at 28.5°E), enabled the company to launch a new all-digital service, Sky Digital, with the potential to carry hundreds of television and radio channels. The Astra 2 fleet at 28.2° east maintains a geostationary orbit 35,600km from earth and was built by Hughes (now Boeing Satellite Systems) and Astrium (now EADS Astrium).

[edit] Timeline

• 1989 — Sky television launches DTH UK service via Astra satellite
• 1990 — Sky subscribers reach 1 million
• 1990 November — British Sky Broadcasting formed by merger of Sky Television and British Satellite Broadcasting (BSB). Murdoch the majority shareholder through News International, BSB partners Pearson and Granada become minority shareholders through BSB Holdings Limited (BSBH)
• 1991 — Of BSB's five channels; Now news programmes merged with Sky News, Galaxy merged with Sky One, the Sports Channel and Movie Channel are maintained, Powerstation is withdrawn. Sky One, Sky News and Sky Movies maintained but Eurosport is withdrawn
• 1992 July — BSkyB sells the former BSB Marcopolo II satellite to Telenor
• 1992 — BSkyB signs exclusive live television rights deal with the FA Premier League
• 1992 December 31 — BSkyB ceases transmissions to Marcopolo I satellite
• 1993 — "Sky Multichannel" packages launched
• 1993 — December — BSkyB sells the former BSB Marcopolo I satellite to NSAB
• 1994 — 17% of BSkyB is floated on the London and New York stock exchanges
• 1994 — Five more channels launch, including Sky Sports 2
• 1995 — Six more channels launched including History Channel and Disney Channel
• 1995 — BSkyB enter the FTSE 100 Index
• 1996 — BSkyB signs an extension of its Premier League rights for £670 million
• 1998 August 30 — First of a new generation of Astra satellites launched, paving way for digital satellite television. Sky Digital launches on October 1
• 1999 — Vivendi SA becomes sole shareholder of BSBH, which held 11.8% of BSkyB at the time. It also acquired the shareholding of Pathé through merger, bringing its total shareholding to 22% (as of 2001). BSkyB Chairman Jérôme Seydoux forced to resign due to sale of Pathé's interest; Murdoch takes Chairmanship to prevent Vivendi acquiring it (as it would be entitled to)
• 2001 — BSkyB signs 5 millionth subscriber. Analogue service discontinued
• 2001 — Sky+ introduced: A set top box/digital video recorder hybrid
• 2001 — December — Vivendi Universal sells part of its shareholding comprising 8% of the company, followed by the remaining 14% in May 2002
• 2002 — BSkyB takes an equal share of Freeview, in partnership with the BBC and Crown Castle (now part of National Grid)
• 2003 — James Murdoch elected as CEO, replacing Tony Ball
• 2003 — Sky subscribers reach 7.5 million
• 2003 — Sky acquires the television series 24 from Fox which was previously shown on the BBC
• 2005 — Sky launches Sky by Broadband, a service available to existing movie and sports service subscribers that allows them to download movies and sports clips direct to their home computer. The service is made available free of charge
• 2006 — Sky HD launches on May 22, with a line-up of 10 high definition channels
• 2006 — Sky acquires Mykindaplace.com to expand its internet presence
• 2006 — Sky acquires Aura Sports Ltd to expand its internet media sales presence
• 2006 — Sky achieves CarbonNeutral status^[9]
• 2006 — Sky launches and allows pre-registering of its new broadband service
• 2006 — Sky is listed as one of the applicants for the licence to manage Ireland's digital terrestrial television network
• 2006 — Sky acquires Season 3 and 4 of Lost in a multi-million pound deal with Buena Vista International Television (previous series were shown on Channel 4)
• 2006 — Sky acquires 17.9% stake in ITV, Britain's largest free-to-air commercial broadcaster.
• 2006 — Sky rebrands VOD services, such as Sky By Broadband, as Sky Anytime, adding US imports to on-demand content.
• 2007 — Sky announces plans to launch pay channels on the digital terrestrial platform.
• 2007 — Secretary of State for Trade and Industry Alistair Darling asks media regulator Ofcom to investigate Sky's purchase of a stake in ITV plc.^[10]
• 2007 — Sky's increased price demands causes Virgin Media to not renew the contract to provide Sky basic channels (effective from 1 March 2007) after negotiations falls through.

[edit] Future

The Economist has suggested that News Corporation would eventually like to merge BSkyB with its US satellite operation, DirecTV and possibly its Star network to form a global satellite TV company^{[citation needed]}. However, News Corporation has now sold its stake in DirecTV; in return for the sale Murdoch got John Malone's stake in News Corp. Sky is also rumoured to be interested in adding NFL Sunday Ticket (currently available on DirecTV in the US).

[edit] EPG

Sky has recently developed a new version of its Sky Guide electronic programme guide (EPG) service, which includes new genres, easier access to channels, and a complete renumbering system. It also includes new hotkeys to get into new menus quicker. This is the biggest change to the Sky EPG since its launch in 1998.

[edit] On Demand services

Main article: Sky Anytime

[edit] High Definition TV (HDTV)

Main article: Sky HD

BSkyB launched its HDTV service, Sky HD, on 22 May 2006. Leading up to the launch, Sky claimed that 40,000 people had signed up to the HD service. However, in the week before the launch rumours started to surface that Sky was having supply problems of its Set Top Box (STB) from manufacturer Thomson. Starting on Thursday 18 May, and then all through the weekend before launch, people were reporting that Sky had either cancelled or rescheduled its installations. Finally, the BBC reported that 17,000 customers had been let down for the launch due to failed deliveries.^[11] Some customers reported installations were only cancelled on the day of the launch. The episode was widely seen as being very embarrassing for Sky, who until that point had been extremely conservative in new service launch schedules. The supply problems were resolved shortly after launch.

[edit] Football rights

BSkyB's purchase of broadcast rights for major sporting events, most importantly Premiership football, has been the bedrock of its success. The company paid over £300 million for the FA Premier League rights, beating the BBC and ITV, and has had a monopoly of live matches since the inception of the Premier League in 1992. Murdoch has described sport as a "battering ram" for pay-television, providing a strong customer base.^[12]

However, following a lengthy legal battle with the European Commission, which deemed the exclusivity of the rights to be against the interests of competition and the consumer, BSkyB's monopoly will come to an end from the 2007–08 season. In May 2006 the Irish broadcaster Setanta Sports was awarded two of the six Premiership packages that the English FA offered to broadcasters. Sky picked up the remaining four for £1.3 billion.^[13]

Cable TV company Virgin Media also offer a pay per view service of selected Premier League matches.

[edit] Set Top Boxes and conditional access

Sky utilizes the VideoGuard pay-TV scrambling system owned by NDS, a News Corporation subsidiary. There are tight controls over use of VideoGuard decoders; they are not available as stand-alone DVB CAMs (Conditional Access Modules). BSkyB has design authority over all digital satellite receivers capable of receiving their service. The receivers, though designed and built by different manufacturers, must conform to the same user interface look-and-feel as all the others. This extends to the Personal video recorder (PVR) offering (branded Sky+). Although the manufacturers have to follow BSkyB's design criteria, this leads to many innovative features such as instant Pay-Per-View (due to the ability to record encrypted streams and decrypt on play). Many people think that giving the broadcaster such total control over the viewing experience (and viewing prices) may keep other PVR features from appearing on BSkyB's receivers due to the monopoly position over the decoding CAMs. BSkyB initially charged additional subscription fees for using a Sky+ PVR with their service; however, from early 2004, this additional £10 per month charge was waived for subscribers whose package includes two or more premium channels or Sky HD boxes to encourage existing owners to upgrade.

[edit] Television channels operated by BSkyB

• At the Races — formerly operated by Channel 4; now owned by Sky
• Sky Active — rebranded from Open...
• Sky Arts — rebranded from Artsworld on March 1, 2007
• Sky Arts HD — rebranded from Artsworld HD on March 1, 2007
• Sky Box Office (pay-per-view)
• Sky Box Office Events
• Sky Box Office HD 1 & 2
• Sky Cinema 1 & 2
• Sky Movies 1–10 (these channels supersede Sky Movies Premier 1–5 and Sky Movies Max/Moviemax 1–4, but not necessarily in that order)
• Sky Movies HD 9 and 10 — Dedicated High Definition Television Movie Channels showing same content as Sky Movies 9 and 10 but in HD
• Sky News
• Sky One
• Sky One HD
• Sky Two — rebranded from Sky Mix on 31 October 2005
• Sky Three — one of the only free-to-view BSkyB channels
• Sky Sports 1–3
• Sky Sports Xtra
• Sky Sports HD
• Sky Sports News
• Sky Travel
• Sky Travel +1
• Sky Travel Extra
• Sky Travel Shop
• Sky Vegas — rebranded from Sky Vegas Live on 19 April 2006
• Sky Poker

[edit] See also

• Sky Digital (UK & Ireland) EPG
• Sky broadband
• Sky Kids magazine
• Sky Magazine

[edit] References

[edit] External links

• sky.com
• Sky Broadband
• Corporate Responsibility: Sky's Street Race In Mumbai, India