For other uses, see Sky Television (disambiguation).

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Sky Television plc (1989-1990) was a four-channel satellite television service launched by Rupert Murdoch's News International on 5 February 1989. Sky Television and rival British Satellite Broadcasting were suffering massive losses and entered into a 50:50 financial merger in November 1990 to form British Sky Broadcasting (BSkyB).

History

In 1983 Rupert Murdoch's News International acquired 80% of Satellite Television UK (SATV), one of the earliest satellite television channels which broadcast from the OTS-2 Orbital Test Satellite to a pan-European audience. 'Satellite Television' was launched on 26th April 1982. The company was a lossmaking enterprise and Murdoch purchased the operation for the sum of £1 plus outstanding debts. The service was renamed Sky Channel in January 1984. The channel became widely available in the Republic of Ireland in 1987. It was relaunched as the multi-channel Sky Television on 5 February 1989 and was one of the first Direct broadcast satellite (DBS) services in the world to become operational. The service had four channels on the Astra 1A satellite, which orbited at 19.2°E: Sky Channel, Eurosport, Sky Movies and Sky News. On launch, two further channels were promised - The Disney Channel and Sky Arts. However Disney withdrew with serious concerns about the poorly managed Sky launch and its impact on the forthcoming launch of the Disney Park in Paris. The Disney Channel did not launch until 1995 and the original Sky Arts launched in 1990 as a short lived opt-out on the Marcopolo satellite version of Sky News for former BSB subscribers to show programmes the former Now channel was contracted to air (it was not broadcast on Astra). The current Sky Arts launched independently of Sky in 2000 as Artsworld, with BSkyB buying out the channel in 2005 and renaming it in 2007. However, a short lived channel under the name of The Arts Channel was broadcast for a brief time on the Astra satellite in 1989. [1]

The Astra satellite was owned by a Luxembourg based consortium, Société Européenne des Satellites and controlled from there, but Sky's broadcasts originated in the UK and were subject to British regulation but not by the tougher regulator, the IBA. Sky was regulated by the Cable Authority.

BSB competition and merger

The impetus for the relaunch as Sky Television was the refusal of the IBA to allow Murdoch to bid for the UK Satellite TV licence won by the British Satellite Broadcasting alliance. This created a battle to win customers in this new multichannel environment. In the end Sky's earlier launch and leasing of transponders on the Astra satellite network allowed it to merge with its rival. In contrast to Sky; BSB suffered from the regulatory burdens of only 5 TV chanells, building and launching its own satellites and more ambitious and expensive technology. Also it had higher capital expenditure overall, such as the construction of its Marco Polo House HQ in London compared to Sky's industrial estate in Isleworth although this was not a decisive factor.

In 1990 both companies were beginning to struggle with the burden of massive losses and in November 1990 there was a 50:50 financial merger, with a management takeover by Sky. 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.

Financial turnaround

The early years of the merged BSkyB saw a haemorrhage of cash from News Corporation funds. At this stage of the company's life it was losing millions of pounds a week. To help turn around the financial fortunes of the company, New Zealand television executive Sam Chisholm was brought on board to manage the day-to-day operations and build the subscriber base. By the time Chisholm left the company BSkyB was the most profitable company in the UK.

Timeline

• 1982 - Satellite Television UK (SATV) launched.
• 1983 - Murdoch's News International takes control of Satellite Television UK (SATV).
• 1984 - renamed Sky Channel.
• 1986 - Granada, Pearson, Virgin and Amstrad form British Satellite Broadcasting (BSB) and win Independent Broadcasting Authority UK satellite franchise.
• 1987 - BSB awarded licence from the IBA and complete over £200m funding with additional shareholders Reed, Chargeurs, London Merchant Securities and others
• 1988 - July - Murdoch announces his intention to relaunch Sky Channel as Sky Television on the Astra satellite system
• 1989 - 5 February - Four channel Sky Television package launched
• 1990 - March - BSB begins broadcasts
• 1990 - November - Both companies had suffered heavy losses and a 50:50 financial merger was agreed to form British Sky Broadcasting.
• 1990 - BSkyB announces former BSB customers will receive Sky equipment (for Astra system) free of charge, Marcopolo satellite transmissions to cease.
• 1992 - July - BSB satellite Marcopolo II sold to Telenor
• 1993 - December - BSB satellite Marcopolo I sold to NSAB.