British Sky Broadcasting (BSkyB - formerly two companies, Sky Television plc and British Satellite Broadcasting) is a company that operates Sky Digital, the most popular subscription television service in the UK and Ireland. It also produces TV content, and owns several TV channels. It is 36.8% owned by News Corporation, an American company chaired by Rupert Murdoch, who also acts as Chairman of BSkyB. For the year to 30 June 2005 BSkyB had turnover of £4.048 billion, and made a profit of £631 million before tax and £425 million after tax. At 19 December 2005 it had 8 million direct to home customers, although this figure included all subscribers of Homechoice, Kingston Interactive Television and every other "Sky By Wire" IPTV service in the UK and Ireland.

Organisation

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.

Joint ventures

• Nickelodeon UK (and related channels) (50%)
• The History Channel (UK) (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%)

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.

History

Further information: Sky Television plc, and British Satellite Broadcasting, and , and , and , and ]

Origins

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.

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

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 2007/2008 season .

Improving technology

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).

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).

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.

Sky by Broadband

In January 2006, Sky launched a service allowing customers who subscribe to the Sky Movies and Sky Sports channels to download video onto their PC through a broadband internet connection. This video is sport highlights, feature-length movies and sports news. This content is allowed to be viewed for a certain number of days, and is protected by digital rights management. This service is available at no extra cost.

Terrestrial competition

BSkyB has faced competition from terrestrial such as the ONdigital digital terrestrial television service (later renamed ITV Digital). BSkyB defeated its rivals partly thanks to aggressive marketing and partly because of its rivals' numerous technical and administrative failures. One of these problems was that its method of encryption was easily breakable. However, 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. Three BSkyB channels are available on this platform: Sky News, Sky Three, and Sky Sports News. Sky Three used to be occupied by Sky Travel until it was replaced on October 31 2005, allowing BSkyB to air its exclusive licenced content with delays of between 12-18 months from their original air dates on Sky One.

In a response to the push towards Free to Air availability, BSkyB has marketed a free to view network (Freesat on Sky) to a limited extent.

Timeline

• 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.
• 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 Jerome Seydoux forced to resign due to sale of Pathe'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 - 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.

Future

Sky is currently developing a new version of it's Sky Guide service, which includes new genres, easier access to channels, and a complete renumbering system. This will have been the biggest change to the Sky EPG since its launch in 1998.

In 2006 BSkyB is planning to launch its own High-definition television (HDTV) services. BSkyB have announced that the service will require a display that has HDMI or DVI interfaces and is HDCP compliant. SkyHD will be using the same Astra 2 satellites as Sky Digital, but using a new DVB standard, DVB-S2. SkyHD will also be using MPEG4 for video compression rather than MPEG2 that is used for Sky Digital. BSkyB started testing HDTV broadcasts in June 2005.

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.

Technology and conditional access

Further information: Sky Plus, and , and , and , and

Sky utilizes the VideoGuard pay-TV scrambling system owned by News Datacom, 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, early in 2004, this additional £10 charge was quashed (albeit only to subscribers whose package includes two or more premium channels) to encourage existing owners to upgrade seamlessly.

Management

Rupert Murdoch's News International (a major subsidary 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.

Sky and cable television

The other two major pay-TV operators in the United Kingdom are the cable operators NTL and Telewest. NTL does not produce a large amount of content of its own. Telewest owns the Flextech production company which produces several channels, but these are low profile compared to Sky's main channels. They broadcast the main Sky channels, and this is one of their principal selling points. Thus they are not only Sky's rivals, but also its two most important customers. They compete with Sky on price, and are able to diferentiate themselves from Sky through their ability to offer bundles of services such as internet access and telephone service. Sky restricts certain content such as interactive services (Sky News Active) to its direct customers. Competition between Sky and the two cable companies is regulated by Ofcom.

See also

• SES Astra
• Sky Digital
• Sky One

British Sky Broadcasting British Sky Broadcasting British Sky Broadcasting