The aim of this essay is to evaluate the notion that the Sky Television service has managed to undermine nascent media empires and create its own unassailable domain within both analogue and digital broadcasting markets through the evolution of Satellite television over the past fifteen years.
The launch of the Sky service
This essay looks at the launch of the Sky service, and the early merger with its first competitor, the company’s ability to elude broadcasting regulators efforts to constrain their operations through both the 1990 and 1996 Broadcasting Acts and Sky’s development and supremacy within the Digital broadcasting market in the UK, against its main competitor ITV Digital.
Sky television was launched on February 5th 1989, part of the Rupert Murdoch owned News International (later to become News Corporation) empire, the business was Britain’s first Satellite television service provider.
The station operated four channels initially, these were;
- Sky Sports,
- Sky Movies and
- Sky 1,
and the service was to be funded by subscriptions and advertising.
Murdoch had been developing cable operations in Britain since 1983; during the next through years as changes were emerging in broadcasting operations through the Thatcher government that favoured deregulation ideals Murdoch was able to re-launch his Sky channel as a DBS (Digital Broadcasting by Satellite) service.
British Satellite Broadcasting (BSB) service
During the same period the IBA (Independent Broadcasting Authority) contracted a franchise to set up a British Satellite Broadcasting (BSB) service, however the service was repeatedly delayed, until it was beaten by Murdoch’s Sky channel DBS launch. When the BSB service finally began transmitting it found it could never really compete with Sky TV’s head start, as Murdoch had chosen to lease four transponders on the Astra Satellite he did not have the high set up costs of launching his own satellites that BSB had.
As Sky had launched first ‘all press coverage was initially about Sky and Satellite dishes meant Sky’ Brunsdon (1997), a consumer perception that BSB could never fully overcome, Sky also pre-empted BSB through securing rights to all the major Hollywood movies. The $300 million pre-launch campaign run by BSB was never recouped, through costly advertising campaigns and fierce competition BSB collapsed after just eight months in November 1990.
Initial consumer uptake of satellite services was slow, ‘the companies had spent between them $1.25 billion to persuade just one in fifteen households to buy their dishes’ Franklin (1997). Sky were also unable to account for their set up costs, they were losing vast amounts of money and only being held up by Murdoch’s other media components, mainly his newspaper commodities.
It was also these commodities that had been a vital weapon in the launch campaign of Sky Television, during which Murdoch’s newspapers (The Times and The Sun) carried news reports of increased demand for satellite dishes, significantly these stories never mentioned (thus did not promote) the BSB service, only emphasising Sky’s service. BSB was quickly absorbed by Sky in merger bid, this take-over resulted in a name change to British Sky Broadcasting (BSkyB), beginning broadcasting in April 1991.
The 1990 Broadcasting Act
The merger was a direct breach of the 1990 Broadcasting Act, which had be issued only the previous day by the new public body; ITC (Independent Television Commission) who had replaced the IBA. The ITC was developed to regulate commercially funded television services in the UK, (this included satellite services), they had to ensure quality broadcasting, and a variety of television services were available across the country, as well as producing a code of governing broadcasting standards.
The BSkyB merger had happened without consultation of the ITC, who were rendered powerless ‘to prevent or influence the union of Sky and BSB’ Crisell (2002), and unable ‘to limit concentration of ownership’ Franklin (1997) this was due to the fact that satellite TV was a transnational business, spreading across national borders which allowed operators to ignore restrictions laid out by some countries.
Another factor which gave Sky power to undermine the government was the knowledge that tight control measures would discourage operators from investing the huge start up costs needed. These factors have allowed Sky to used methods of maximising audiences with little government restriction or influence. The 1990 Broadcasting Act lacked specifications for regulating broadcasters and the New ITC body was to govern with a ‘lighter touch’ Franklin (1997) than the IBA all of which allowed for BSkyB’s development in the early nineties.
During the early nineties BSkyB began to start to make a profit, in 1992 Murdoch encrypted some channels so that viewers were having to pay to view certain programmes such as; Sky Sports channel events, following this the Sky network was re-launched in 1993 with a fifteen channel package that viewers could subscribe to annually. Profits started to increase rapidly and by the end of 1993 BSkyB reported that ‘the previous year’s loss of i?? 20.
Cite this essay
The Sky service. (2020, Jun 02). Retrieved from https://studymoose.com/the-itc-13379-new-essay