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| 18th | Top television networks by country |
| 1st | Top assets owned by News Corporation |
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| Type | Public (LSE: BSY) |
|---|---|
| Founded | 1990; BSB 1986 and Sky 1989 |
| Headquarters | London, England, United Kingdom |
| Key people | James Murdoch (Chairman) Jeremy Darroch (CEO) |
| Industry | Media |
| Products | Pay TV services Programming |
| Revenue | £5,359 million (2009)[1] |
| Operating income | £813 million (2009)[1] |
| Net income | £259 million (2009)[1] |
| Employees | 16,000 (2010)[2] |
| Website | www.sky.com |
British Sky Broadcasting (BSkyB) (LSE: BSY) is a company that operates Sky Digital, a subscription television service in the UK and Ireland. It produces TV content, and owns several TV channels. It is the UK's largest pay TV provider. More than a third of the equity is owned by News Corporation, an American company chaired by Rupert Murdoch; News Corporation's precise shareholding fluctuates due to share options and buy backs and was 39.1% at May 2009.[3] As of 30 September 2008 it had 9,067,000 direct to home customers in the UK and Ireland. As of February 2007, it also had 3,294,000 indirect customers through the cable operator Virgin Media & through IPTV operator TalkTalk TV in the UK, and a further 604,000 indirect cable customers on UPC Ireland in Ireland. It is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index.
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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 at 19.2° east 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.
Sky has also worked together with Tata Group bringing Tata Sky in India and substituary states.
By 1990 both Rupert Murdoch's Sky Television and the BSB alliance were beginning to struggle with the burden of massive losses which led to a 50:50 financial merger in November 1990.
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. 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 and equipment apparently solved the company's problems.
The launch of the Astra 2A satellite at a new orbital position, 28.2° east, in 1998 (subsequently 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.
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, about 78% of New Zealand's SKY Network Television Limited and b.net of Croatia and Montenegro.
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.[17]
On 7 December 2007 it was announced that Rupert Murdoch would be stepping down as BSkyB's Non-Executive Chairman and would be replaced by his son, James. It was also announced that James would be stepping down as CEO of BSkyB and will be replaced by Jeremy Darroch.[18]
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.
| Year ended | Turnover (£m) | Profit/(loss) before tax (£m) |
Net profit/ (loss)(£m) |
|---|---|---|---|
| 30 June 2009 | 5,359 | 456 | 259 |
| 30 June 2008 | 4,952 | 60 | (127) |
| 30 June 2007 | 4,551 | 815 | 499 |
| 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 |
| 30 June 1996 | 1,008 | 257 | - |
| 30 June 1995 | 778 | 155 | - |
| 30 June 1994 | 550 | 93 | - |
| 30 June 1993 | 380 | (76) | - |
| 30 June 1992 | 233 | (188) | - |
| 30 June 1991 | 93 | (759) | - |
The main headquarters are in Osterley, London. Sky originated material is uplinked to the satellite from BSB's original earth station at Chilworth, outside Southampton (and from the BT owned Madley Communications Centre and London Teleport earthstations).
The largest concentration of Sky staff in the UK is in Scotland; the main areas being in Livingston and Dunfermline. There is also Uddingston. These house Sky's contact centres as well as the IT departments, Finance departments and Field Operations. Other contact centres are in Yorkshire, Lancashire and Glasgow. There is also a contact centre dedicated to customer upgrades in Cardiff, though this is outsourced to Conduit.[19]
The Ofcom Consumer Panel complained that the BSkyB plan to operate pay TV services on Freeview was "generating serious consumer detriment"[20] and the National Consumer Council call the BSkyB plan "bad news for consumers,"[21] 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."[22]
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.
Virgin Media currently includes Virgin Media Television, previously the content arm of Telewest known as Flextech Television, which owns several channels, including the Sky1's direct rival Virgin1 and a 50% stake in the UKTV network. Virgin is understood to be seeking to sell this business, and as at May 29, 2009, BSkyB is understood to have made the largest bid at auction.[23]
Like Sky, Virgin Media offers a high-definition television (HDTV) capable set top box, although from 30 November 2006 until 30 July 2009 it only carried one linear HD channel, BBC HD, after the conclusion of the ITV HD trial. Virgin has claimed that other HD channels were "locked up" or otherwise withheld from their platform[24], although Virgin did in fact have an option to carry Channel 4 HD in the future[25][26]. Nonetheless, the linear channels were not offered, Virgin instead concentrating on its Video On Demand service[27] to carry a modest selection of HD content.[28] Virgin has nevertheless made a number of statements[24][29][30] over the years, suggesting that more linear HD channels are on the way.
In Q3 2009 Virgin announced that it was making more linear HD channels available on its platform, including FX HD, MTVN HD, Channel 4 HD, and National Geographic HD. As expected, Living HD followed shortly.
In 2007, BSkyB and Virgin Media became involved in a dispute over the carriage of Sky channels on cable TV. The failure to renew the existing carriage agreements negotiated with NTL and Telewest resulted in Virgin removing the basic channels from the network on 1 March 2007. Virgin claimed that Sky had substantially increased the asking price for the channels, a claim which Sky denied, on the basis that their new deal offered "substantially more value" by including HD channels and Video On Demand content which was not previously carried by cable.[31]
In response, Sky ran a number of TV, radio and print advertisements claiming that Virgin media 'doubted the value' of the channels concerned, at first urging Virgin customers to call their cable operator to show their support for Sky, but later urging Virgin customers to migrate to Sky to continue receiving the channels. The broadcasting regulator Ofcom subsequently found these commercials in breach of their code.[32]
The availability (at an extra charge) of Sky's premium sport and movie services was not effected by the dispute. This impasse continued for twenty-one months, with both companies initiating High Court proceedings.[33] Amongst Virgin's claims to the court[34] (denied by Sky)[35] were that Sky had unfairly reduced the amount which it paid to VMTV for the carriage of Virgin's own channels on satellite.
Eventually, on 4 November 2008 it was announced that an agreement had been struck for Sky's Basic channels – including Sky1, Sky2, Sky3, Sky News, Sky Sports News, Sky Arts 1, Sky Arts 2, Sky Real Lives and Sky Real Lives 2 to return to Virgin Media from 13 November 2008 until 12 June 2011. In exchange will be provided continued carriage of Virgin Media Television's channels – Living, Livingit, Bravo, Bravo +1, Trouble, Challenge and Virgin1 for the same period.[36]
The agreements include fixed annual carriage fees of £30m for the channels with both channel suppliers able to secure additional capped payments if their channels meet certain performance-related targets. Currently there is no indication as to whether the new deal includes the additional Video On Demand and High Definition content which had previously been offered by Sky. As part of the agreements, both Sky and Virgin Media agreed to terminate all High Court proceedings against each other relating to the carriage of their respective basic channels.[37]
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. TalkTalk TV also offers an IPTV service with many channels, including Sky's channels, delivered to a set top box over ADSL.
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 start offering its "Sky Anytime on PC" service as well as a "triple play" package combining satellite television, land-line telephone and Broadband service. Sky also offers some streaming live TV channels to a computer using Microsoft's Silverlight.
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 free-to-air replacement, Freeview, in which it holds an equal stake with the BBC, ITV, Channel 4 and National Grid Wireless. Prior to October 2005, three BSkyB channels were 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 8 February 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.[38] 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.[39]
ITV plc has been the subject of a flurry of rumoured take-over and merger bids since it was formed. For example, on 9 November 2006, NTL announced that it had approached ITV plc about a proposed merger [40][41]. The merger was effectively blocked by BSkyB on 17 November 2006 when it controversially bought a 17.9% stake in ITV plc for £940 million [42], a move that attracted anger from NTL shareholder Richard Branson[43] and an investigation from media and telecoms regulator Ofcom[44]. On 6 December 2006, NTL announced that it had complained to the Office of Fair Trading about BSkyB's move. NTL stated that it had withdrawn its attempt to buy ITV plc, citing that it did not believe that there was any possibility to make a deal on favourable terms[45]. At the same time as the NTL bid, RTL, the owner of Five, was also rumoured to be preparing a bid for ITV plc,[46] with the possibility of a stock-swap with BSkyB. The plan would see RTL acquiring BSkyB's stake in ITV plc (with the aim of further acquisitions of shares in the future) in exchange for BSkyB taking full control of Five. However, no move from RTL has yet materialised so far.
On 28 January 2010, Sky revealed that it would start broadcasting programmes in 3D by April. This action would make a new Sky Sports 3D and possibly a Sky Movies 3D. Normal channels such as Sky1 may also be available in 3D, but it is not funded or approved yet. Sky experimented with 3D broadcasting by showing an Arsenal vs Manchester United game in 3D, live in nine pubs throughout the UK[47].
Sky has 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. The EPG is also available for iPhone and iPod Touch, allowing users to download the app and set programmes to record potentially anywhere (dependant on the Sky Box's network setup).
Sky Anytime is the current brand for Sky's on-demand services currently available on TV (Sky+ and Sky+ HD),PS3 XBOX 360 and 3G mobile phones. Sky Anytime on PC has been rebranded to Sky Player
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.[48] 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.
According to figures published by Sky, there were 591,000 subscribers to the Sky HD service by 30 September 2008.[49]
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 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.[50]
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 came 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.[51]
BT offer a pay per view service of selected Premier League matches through their BT Vision service[52], and Virgin Media offer free highlights on the Virgin Media website.
In September 2008, BT announced that it is thinking of bidding for live Premier League matches when the bidding starts in January 2009.[53]
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+). BSkyB initially charged additional subscription fees for using a Sky+ PVR with their service; waiving the charge for subscribers whose package included two or more premium channels. This changed as from 1 July 2007, and now customers that have Sky+ and subscribe to any Sky subscription package get Sky+ included at no extra charge. Customers that don't subscribe to Sky's channels can still pay a monthly fee to enable Sky+ functions. In January 2010 Sky discontinued the Sky+ Box, limited the standard Sky Box to Multiroom upgrade only and started to issue the Sky+HD Box as standard, thus giving all new subscribers the functions of Sky+.[54] In September 2007, Sky launched a new TV advertising campaign targeting Sky+ at women. As of 31 March 2008 Sky have 3,393,000 Sky+ users.[55]
On 29 May 2009 it was confirmed that Sky Player would be made available via Microsoft's Xbox 360 games console.[56] Included is live streaming of various television channels, on-demand movies and live sports programming. This was a worldwide first for Microsoft, and only available in the UK and Ireland. PS3 Sky said they are in talks with Sony to bring Sky player and 3D television to PS3 when sony launchs subscription service on PSN.
Sky subscribers in the Republic of Ireland have a more restricted choice of channels compared to Northern Ireland or Great Britain subscribers. The standard Irish channels RTÉ One, RTÉ Two, TV3, TG4 and 3e are available to all Irish subscribers and unavailable by any other means on Satellite. However only BBC One Northern Ireland, BBC Two Northern Ireland and Channel 4 are available to Irish Sky subscribers. Free to air channels like the ITV family of channels, BBC Three, BBC Four, BBC News, BBC HD and Five can only be tuned via the Other Channels[57] section. As these channels are only available via the Other Channels section it is not possible for Irish Sky+ or Sky HD subscribers to record programmes from these channels onto their boxes. Sky pays the BBC for the right to include BBC One and BBC Two NI on the Irish EPG.[citation needed] Northern Ireland subscribers in some packages get RTÉ One, RTÉ Two and TG4, since the signing of the good friday agreement to left RTE broadcast there. RTE is the biggest channelin Ireland and the 2nd biggiest in Europe.
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   | BSY - B SKY B GROUP Share Price | BSY.L - Yahoo! Finance UK |
| | Murdoch's rise to the top - BBC NEWS | Special Report | 1999 | 03/99 | murdochs big match | Murdoch's rise to the top |
| | Sky HDTV launch runs into trouble - BBC NEWS | Entertainment | Sky HDTV launch runs into trouble |
| | Setanta joins Premiership action - BBC NEWS | Business | Setanta joins Premiership action |
| | Sky to launch new DTT service - Digital TV - News - Sky to launch new DTT service - Digital Spy |
| | Sky rethinks Freeview exit and football strategy - Sky rethinks Freeview exit and football strategy - Brand Republic News - Brand Republic |
| | Rupert and the joys of nepotism - Emily Bell: Rupert and the joys of nepotism | Media | The Guardian |
| | Minister takes on Murdoch over Sky stake in ITV - Minister takes on Murdoch over Sky stake in ITV - Business News, Business - The Independent |
| | BSkyB swoops on internet provider - BBC NEWS | Business | BSkyB swoops on internet provider |
| | BSkyB agrees £125m Amstrad deal - BBC NEWS | Business | BSkyB agrees £125m Amstrad deal |
| | BSkyB's new Sky+ advert claims to show What Women Think - BSkyB's new Sky+ advert claims to show What Women Think : Tech Digest |
| | Sky TV Guide - Sky Tv Guide - A free listing of all the popular tv channels |
| | BSkyB passes 1 million broadband customers - BSkyB passes 1 million broadband customers | Technology | Reuters |
| | BSkyB offers ITV vote surrender - BBC NEWS | Business | BSkyB offers ITV vote surrender |
| | Ofcom examines impact of Sky's ITV stake - Broadcasting - News - Ofcom examines impact of Sky's ITV stake - Digital Spy |
| | Sky/ITV: Branson statement in full - Broadcasting - News - Sky/ITV: Branson statement in full - Digital Spy |
| | NTL complains about Sky as it drops plans for ITV Ofcom - Broadcasting - News - NTL complains about Sky as it drops plans for ITV - Digital Spy |
| | RTL to make ITV decision this week - Broadcasting - News - RTL to make ITV decision this week - Digital Spy |
| | Sky buys 17.9% of ITV - Broadcasting - News - Sky buys 17.9% of ITV - Digital Spy |
| | Sky Broadband customer homepage - sky-broadband.com |
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