10 Years Of Sky
Ten years ago to the day, Rupert Murdoch’s Sky TV launched its service in the UK on the Astra satellite with a four channel network. Today, Sky has grown to become one of the biggest players in the global media playground, being the first to provide consumers with the opportunity of multichannel TV. Today, from media minnow to global giant, Sky is one of the world’s top 250 companies.
Sky has certainly come a long way for a company which at its launch very few took seriously. After its first year of launch, Sky claimed to have reached over a million UK homes. The co-existing British Satellite Broadcasting (BSB) service accounted for only 175,000 of the 1.2 million homes receiving satellite television, and subsequently Sky and BSB merged towards the end of 1990 to become British Sky Broadcasting (BSkyB).
The merging of the two satellite networks seemed to consolidate any confusion there might have been amongst consumers concerning satellite TV and a rapid increase in up-take ensued. By 1993 BSkyB had 14 channels available at a basic subscription rate and had the virtual monopoly on subscription television in the UK. In the beginning its most obvious attraction might well have been its two movie channels. However, the broadcaster’s strategy for success has remained constant throughout its reign – to dominate television sports coverage.
BSkyB secured the rights to live FA Premier League football coverage in 1992, and launched a second sports channel, Sky Sports 2, in 1994. In 1996, the broadcaster announced a 4 year extension to this deal, securing live coverage until the end of the 2000/2001 season. 1994 also saw the introduction of the pay-per-view idea, with Frank Bruno’s defence of the heavyweight championship. BSkyB’s sports subscription methods did cause controversy however, and that year the National Heritage’s select committee was concerned over the amount of sport being rationed by subscription television and ruled that viewers should have access to national sporting events. The committee decided that the 1990 Broadcasting Act didn’t protect viewers enough, and issued a list of sporting events, including Wimbledon Finals Week, the Grand National and the FA Cup Final, which should be available to all viewers.
In 1997, BSkyB achieved its highest viewing figures ever, with four million people tuning in to see England qualifying for the World Cup after drawing against Italy. Sky Box Office introduced pay-per-view movies to its customers. Today, BSkyB reaches more than 20 million viewers in 6.8 million households, in Britain alone that accounts for one third of all homes.
1998 was a vital year for the broadcaster as it saw the much talked about launch of the ‘digital revolution’. BSkyB launched its digital satellite service at the beginning of October, and ONdigital, jointly owned by Carlton Communications and Granada, followed in mid-November with its terrestrial digital television package. Latest figures from GfK Marketing Services show that a total of 171,000 digital television set-top boxes were sold over Christmas 1998, combining sales to both BSkyB and ONdigital. Predictions estimated that BSkyB would have secured 200,000 subscribers to its digital service by the end of 1998, however Newsline understands that actual sales were just over the 100,000 mark.
Another major development of 1998 was Sky’s controversial bid for Manchester United Football Club. The broadcaster offered £623 million for one of the world’s most famous clubs, and the bid is currently being assessed by the Monopolies and Mergers Commission (MMC) with reference to its implications for competition within the sports and television markets. The move is consistent with the belief that sport is Sky’s major selling point. BSkyB already has a 50% share in the Manchester United television channel, MUTV, launched last year.
1999 should prove to be an equally important year for BSKyB. The broadcaster is currently undergoing a price enquiry by the ITC over its television ‘bundling’ packages. A decision on whether its Manchester United bid will be permitted to go ahead is expected from the MMC in March, and next week sees the release of the group’s financial results for the year just ended.
Various cable digital television services are due to launch this year from the likes of Cable & Wireless and Telewest, and although it is doubtful that the new cable platforms will overtake Sky Digital in the short term, they will most definitely rival it in the long-run.
Considering its rather shaky start, Sky must be respected, not for just surviving the past decade, but actually growing in size and strength to reach the position it holds in the UK TV market today. And it continues to grow. As well as launching its new digital platform last year, the group also formed its own film production company called Sky Pictures. The new production arm has a budget of £80 million for the next two years, and is expected to release 20 movies in that time.
Despite its success however, the strategies used by Sky to succeed have always been controversial, and the group suffers from a poor public image – it recently appointed branding consultancy Wolff Olins to address this problem. The broadcaster’s track record suggests however that the group has mustered enough strength in the last ten years to enable it to tackle most problems in future.