British Satellite Broadcasting
| Company type | Public limited company |
|---|---|
| Industry | Satellite television |
| Founded | December 11, 1986 |
| Defunct | November 2, 1990 |
| Fate | Merged with Sky Television plc to form British Sky Broadcasting |
| Headquarters | London , United Kingdom |
| Products | Direct broadcast satellite TV services |
British Satellite Broadcasting plc (BSB) was a television company headquartered in London that offered direct broadcast satellite TV services across the United Kingdom. Its transmissions commenced on 25 March 1990, and on 2 November 1990, it merged with Sky Television plc to establish British Sky Broadcasting.
Development
During the World Administrative Radio Conference in January 1977, five high-powered direct broadcast satellite channels per nation were allocated for domestic usage. By 1982, having been assigned two channels, the BBC proposed launching its own satellite service, contingent upon government stipulations:
- Deployment of a satellite constructed by United Satellite, a partnership between British Aerospace and Matra Marconi Space, with projected annual expenses of £24 million.
- A supplementary charter issued in May 1983 permitted the BBC to borrow up to £225 million to finance the initiative, as funding from public sources or existing revenues was disallowed.
By late 1983, due to underestimated expenditure, the Home Secretary reassigned the remaining three channels to the Independent Broadcasting Authority (IBA), thereby enabling competition from private entities against the BBC. Subsequently, the BBC and IBA entered negotiations for a collaborative venture, and the government authorized private firms ("Club of 21") to participate:
- BBC – 50%
- ITV franchise holders – 30%
- Virgin/Thorn EMI/Granada TV Rental/Pearson Longman/Consolidated Satellite Broadcasting – 20%
Within a year, the consortium postponed the planned launch from 1986 to 1989 and sought governmental consent to open bidding for satellite system construction as a cost-saving measure. On 15 June 1985, the project was abandoned after costs were judged prohibitive; the BBC attributed this to government mandates requiring the "Club of 21" to finance both construction and launch of a dedicated satellite.
IBA satellite franchise
On 2 April 1986, the IBA convinced the Home Secretary to restart the DBS initiative under revised conditions, following a report by John Jackson. Private companies were invited to apply for a satellite television franchise to operate commercial services on three of the five UK DBS channels allocated by the IBA. Applicants had to adopt the then-unproven D-MAC transmission standard, part of a European Communities effort promoting the HD-MAC high-definition television system developed by Philips and partners. This technology was incompatible with existing PAL or SECAM television sets. The earlier requirement for a high-power (230 watt) satellite was removed, allowing winners to procure foreign satellite systems.
The IBA received five principal bids for direct broadcast satellite franchises, alongside additional offers from The Children's Channel and ITN for programming provision:
| Franchise name | Consortium led by | Proposed channels |
|---|---|---|
| British Satellite Broadcasting | ||
| DBS UK Limited |
| |
| Direct Broadcasting Limited |
|
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| National Broadcasting Service |
|
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| SatUK Broadcasting |
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Winning bid
On 11 December 1986, British Satellite Broadcasting secured the 15-year licence to operate the DBS system, authorized to broadcast three channels. BSB projected that 400,000 households would be equipped during its inaugural year, although skepticism surrounded this estimate. The Cable Authority endorsed the service, expecting expansion fueled by its exclusive movie channel. The initial four satellite channels included:
| Channel name | Description |
|---|---|
| Screen[lower-alpha 1] | A subscription-based movie channel priced at £2.50 weekly, showcasing recent film releases alongside a minimum of twelve new productions annually. |
| ZigZag | Daytime family programming (shared with Screen) featuring Disney classics, animated shows, nature documentaries, and child-friendly content. |
| Galaxy | Evening general entertainment from 6:00 pm including dramas, serials, plays, soap operas, and quiz programs. |
| Now | A continuous 24-hour channel delivering live news, sports, and current affairs produced by ITN, covering global events extensively. |
Preparations for launch
After obtaining the licence, Amstrad withdrew its support, doubting the practicality of marketing a satellite dish and D-MAC receiver for £250. Australian entrepreneur Alan Bond joined the consortium alongside Reed Elsevier, Chargeurs, Next, among others. BSB dedicated the majority of its initial funding to purchasing and launching two Hughes-manufactured satellites aboard McDonnell Douglas rockets, with payment deferred until the satellites were operational—minimizing financial risk.
On 8 June 1988, competitor Rupert Murdoch unveiled his four-channel UK-based Sky Television, broadcasting via the Astra satellite using PAL format with analogue audio. BSB had initially dismissed Astra’s challenge based on regulatory guidance and technical assumptions about dish dimensions and scrambling security. Lazard Brothers regarded Astra as driven by technology rather than programming content and unlikely to pose a serious threat to BSB.
This rivalry established a competitive environment: BSB sought to be the exclusive satellite provider in the UK offering both sophisticated and mainstream programming transmitted in superior D-MAC format—providing enhanced image clarity, digital stereo sound, and widescreen capabilities—contrasting Sky’s PAL system. SES initially lacked regulatory clearance and experienced satellite launch delays but utilized this interval to reduce required dish sizes.
To differentiate from Sky’s dishes, BSB introduced the flat-panel "squarial" antenna measuring under 45 cm in width; a similarly sized traditional dish was also available. However, technical difficulties with ITT’s D-MAC silicon chips postponed the launch beyond the targeted September 1989 date. To attract subscribers, BSB and BBC competed for premier football broadcasting rights in July 1988, outbidding ITV’s £44 million offer. BSB invested approximately £400 million to secure film libraries from Paramount, Universal, Columbia, and MGM/United Artists with upfront payments near £85 million.
By February 1989 expenses reached £354 million; CEO Anthony Simonds-Gooding refuted claims of budget overruns beyond the planned £625 million through 1993. Virgin withdrew from the consortium in December 1988 due to escalating costs and privatization plans; it sold its stake to Bond Corporation after failing to find alternative buyers.
Despite setbacks, BSB committed substantial resources to marketing during 1989 to counter Sky's early market entry. In June 1989 BSB was awarded franchises for two remaining high-powered DBS channels following BBC’s withdrawal. The channel lineup expanded to include dedicated services for films, sports, pop music, general entertainment, and current affairs—necessitating larger dishes (35–40 cm), although subsidies helped maintain retail prices at £250.
Introduction of five-channel lineup
BSB introduced a suite of five satellite channels aimed at the general audience, alongside a sixth part-time subscription channel tailored for commercial users, delivered through its affiliate BSB Datavision. This subsidiary facilitated encrypted television sets and data reception using home-based receivers. The rollout of BSB’s channels occurred over five successive days:
| Channel name | Launch date | Overview |
|---|---|---|
| The Movie Channel | 25 March 1990 | A film-focused channel broadcasting recent movie releases to subscribers at a monthly fee of £10. |
| Galaxy | 26 March 1990 | Entertainment channel offering a mix of comedy, drama, and children’s programming. |
| The Sports Channel | 27 March 1990 | Dedicated sports channel featuring coverage of international, Scottish, and Italian football, as well as golf, boxing, and tennis. Shared airtime with The Computer Channel. |
| Now | 28 March 1990 | Lifestyle channel broadcasting weekday lifestyle and current affairs content, with arts programming on weekends. |
| The Power Station | 29 March 1990 | Music-oriented channel targeting teenagers with live concerts and music shows. |
| The Computer Channel | 28 June 1990 (Closed: 29 November 1990) |
Technology-focused channel providing training programmes related to IT and the computer industry. Shared broadcast time with The Sports Channel. |
BSB commenced its cable broadcasting service on 25 March 1990, followed by satellite transmissions at the end of April under the tagline It's Smart to be Square. The launch was delayed by six months, occurring thirteen months after Sky’s initial broadcast. These postponements were attributed to supply challenges with receiver equipment and a deliberate strategy by BSB to avoid Sky’s early launch difficulties caused by limited hardware availability.
At the time of its debut, BSB reported approximately 750,000 subscribers, whereas Sky had already reached over 1.5 million households. Industry analysts anticipated that both companies would achieve financial break-even at around three million subscriptions, projected for 1992.
Rivalry and consolidation
Sky’s initial dominance over BSB demonstrated that the PAL system delivered satisfactory picture quality and that many viewers favored Sky’s populist programming rather than BSB’s emphasis on premium content. Sky launched its multichannel offerings from studios based in Isleworth, securing a decade-long lease on SES transponders for roughly £50 million without backup arrangements. In contrast, BSB operated from more expensive premises at Marco Polo House in Battersea, investing an estimated £200 million in developing and deploying its proprietary satellites, which included backup capacity.
When BSB entered the market in March 1990—thirteen months after Sky—it had resolved technical issues and received favorable critical reviews for its programming. However, BSB’s D-MAC receivers were costlier and incompatible with Sky’s PAL-based equipment. Many potential customers postponed purchasing decisions amid this format competition, awaiting clarity on which platform would prevail. Both broadcasters incurred escalating losses, mounting debts, and substantial startup expenses. On 2 November 1990, they merged equally to form British Sky Broadcasting (BSkyB), which was marketed under the "Sky" brand.
Following the merger, BSkyB rationalized its channel offerings:
| Channel name | Summary |
|---|---|
| Galaxy | Entertainment channel discontinued; its transponder was reassigned to Sky One on 2 December 1990. |
| Now | Lifestyle, factual, and arts channel closed; transponder repurposed for Sky News on 1 December 1990. A temporary weekend opt-out branded as Sky Arts continued transmission on the Marcopolo transponder. |
| The Power Station | Music channel operated until 8 April 1991; subsequently replaced by Sky Movies on the Marcopolo transponder. |
| The Sports Channel | Initially retained but rebranded as Sky Sports on 20 April 1991. |
| The Movie Channel | Continued broadcasting via Marcopolo transponder until the launch of the Astra 1B system on 15 April 1991. |
Outcomes
The merger yielded significant financial gains for BSB shareholders and Murdoch's News International, which controlled an almost exclusive hold over British satellite pay-TV. BSB's existence curtailed News International from monopolizing all earnings, thereby restricting Murdoch's sway over governmental decisions. At one stage, News International risked being dismantled by its financiers.
Following Comcast's acquisition of Sky in October 2018, Murdoch withdrew from British television ventures but maintained ownership of newspaper holdings through News Corp.
Eventually, the Marcopolo satellites were decommissioned and sold: Marcopolo 1 was transferred to Sweden's NSAB on 21 December 1993, while Marcopolo 2 went to Norway's Telenor on 1 July 1992. NSAB operated Marcopolo 1 (renamed Sirius 1) until it was moved to a disposal orbit in 2003 due to fuel exhaustion. Marcopolo 2 (known as Thor 1) remained in service until its disposal in January 2002.
Regulatory context
The Multiplexed Analogue Components technology, originally created for high-definition TV, was adopted by the Commission of the European Communities as the standard for direct broadcast satellites after European manufacturers secured patents on variations and influenced regulators. This compelled lower-cost non-European producers to pay licensing fees and restricted their direct access to the technology, diminishing their competitive advantage.
In the United Kingdom, the Independent Broadcasting Authority (IBA) developed D-MAC, a variant offering slight audio enhancements, and mandated its use for licensed satellite broadcasts. Elsewhere across Europe, manufacturers favored D2-MAC, which utilized less bandwidth and was compatible with existing cable infrastructure. With BSB’s introduction, the IBA became part of the confidential "MAC Club," a consortium of European entities holding patents on MAC variants and sharing royalties from television sets and set-top boxes sold.
The IBA did not function as an economic regulator, permitting market competitors such as SES Astra to capitalize on more affordable PAL transmissions and pre-existing set-top box technologies. Murdoch voluntarily adhered to non-economic regulations imposed by the Broadcasting Standards Commission, including technical standards. The obsolete encryption embedded in D-MAC silicon chips contributed to BSB’s merger with Sky, which subsequently opened the market to Far Eastern manufacturers when MAC technology was replaced by PAL.
After the merger, BSB D-MAC receivers were sold at low prices and adapted by hobbyists to receive D2-MAC transmissions from other satellites. Companies like Trac Satellite provided upgrade kits enabling retuning, improved menu interfaces, decoding of 'soft' encrypted channels, and smart card reader support—assuming the receiver contained more recent MAC chipsets.
Location
Marco Polo House, a marble-effect glass office complex located at 346 Queenstown Road overlooking Battersea Park in the London Borough of Wandsworth, was built between 1987 and 1989 by Peter Argyrou Associates at a cost of £26 million.
Following staff layoffs after BSB’s merger, only a small number transitioned to Sky Television’s Isleworth studios. The building stayed under new ownership and from 1 October 1993 served as headquarters for British shopping channel QVC. The broadcasting platform ITV Digital also occupied portions of the premises until it entered administration in March 2002.
Marco Polo House was demolished in March 2014 and replaced with high-end residential apartments.
Further reading
- Murdoch's Time of Reckoning, New York Times, 20 December 1990
- Peter Chippindale, Suzanne Franks, and Roma Felstein, Dished!: The Rise and Decline of British Satellite Broadcasting, Simon & Schuster Ltd, London, 1991
- Kenneth H. F. Dyson and Peter Humphreys, Broadcasting and New Media Policies in Western Europe, ISBN 9780415005098
External links
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