British Satellite Broadcasting
Encyclopedia
British Satellite Broadcasting (BSB) was a British
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...

 television company which provided direct broadcast satellite
Direct broadcast satellite
Direct broadcast satellite is a term used to refer to satellite television broadcasts intended for home reception.A designation broader than DBS would be direct-to-home signals, or DTH. This has initially distinguished the transmissions directly intended for home viewers from cable television...

 television services to the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...

. The company was merged with Sky Television plc
Sky Television plc
Sky Television plc was a public limited company which operated its four-channel satellite television service, launched by Rupert Murdoch's News International on 5 February 1989...

 in November 1990 to form British Sky Broadcasting (BSkyB).

Background

The British Satellite Broadcasting consortium was formed in 1986 by Granada Television
Granada Television
Granada Television is the ITV contractor for North West England. Based in Manchester since its inception, it is the only surviving original ITA franchisee from 1954 and is ITV's most successful....

, Pearson
Pearson PLC
Pearson plc is a global media and education company headquartered in London, United Kingdom. It is both the largest education company and the largest book publisher in the world, with consumer imprints including Penguin, Dorling Kindersley and Ladybird...

, Virgin
Virgin Group
Virgin Group Limited is a British branded venture capital conglomerate organisation founded by business tycoon Richard Branson. The core business areas are travel, entertainment and lifestyle. Virgin Group's date of incorporation is listed as 1989 by Companies House, who class it as a holding...

, Anglia Television
Anglia Television
Anglia Television is the ITV franchise holder for the East Anglia franchise region. Although Anglia Television takes its name from East Anglia, its transmission coverage extends beyond the generally accepted boundaries of that region. The station is based at Anglia House in Norwich, with regional...

 and Amstrad
Amstrad
Amstrad is a British electronics company, now wholly owned by BSkyB. As of 2006, Amstrad's main business is manufacturing Sky Digital interactive boxes....

. In early 1988, the BSB consortium was awarded a licence to operate three channels by the Independent Broadcasting Authority (IBA). Around the time of the licence award, Amstrad
Amstrad
Amstrad is a British electronics company, now wholly owned by BSkyB. As of 2006, Amstrad's main business is manufacturing Sky Digital interactive boxes....

 withdrew its backing and Australian businessman Alan Bond
Alan Bond (businessman)
Alan Bond is an Australian businessman noted for his criminal convictions and high-profile business dealings, including what was at the time the biggest corporate collapse in Australian history. Bond was born in the Hammersmith district of London, England, and emigrated to Australia with his...

 joined the consortium along with Reed International, Chargeurs
Chargeurs
Chargeurs Réunis was a major French company formed in 1872.-History:Chargeurs was a shareholder in British Satellite Broadcasting, the official UK satellite broadcaster. BSB was set up in 1986 in competition with Rupert Murdoch's Sky Television...

, Next plc and London Merchant Securities
Derwent London
Derwent London is a leading British-based property investment and development business. It is headquartered in London and is a constituent of the FTSE 250 Index.-History:...

 amongst others.

Rival tycoon Rupert Murdoch
Rupert Murdoch
Keith Rupert Murdoch, AC, KSG is an Australian-American business magnate. He is the founder and Chairman and CEO of , the world's second-largest media conglomerate....

, having failed to gain regulatory approval for his own satellite service, announced in July 1988 that his pan-European television station, Sky Channel, would be relaunched as a four channel UK-based service, Sky Television
Sky Television plc
Sky Television plc was a public limited company which operated its four-channel satellite television service, launched by Rupert Murdoch's News International on 5 February 1989...

. The BBC
BBC
The British Broadcasting Corporation is a British public service broadcaster. Its headquarters is at Broadcasting House in the City of Westminster, London. It is the largest broadcaster in the world, with about 23,000 staff...

 had previously proposed its own satellite service, but pulled out when the government insisted that the BBC should pay for the satellite's construction and launch. In addition to BSB's three channels, licences for two more channels would be put out to tender.

The stage was set for a dramatic confrontation. BSB, anticipated as the UK's only satellite service, was faced with an aggressive drive by Murdoch's Sky to be the first service to launch.

BSB was forced by the conditions of its licence to pay for the construction and launch of two satellites, named Marcopolo 1 and 2 after the explorer Marco Polo
Marco Polo
Marco Polo was a Venetian merchant traveler from the Venetian Republic whose travels are recorded in Il Milione, a book which did much to introduce Europeans to Central Asia and China. He learned about trading whilst his father and uncle, Niccolò and Maffeo, travelled through Asia and apparently...

, capable of broadcasting five channels that could be received on 30cm (12") diameter dishes. The satellites were high powered versions of Hughes Space and Communications'
Hughes Aircraft
Hughes Aircraft Company was a major American aerospace and defense contractor founded in 1932 by Howard Hughes in Culver City, California as a division of Hughes Tool Company...

 HS376 satellites. As Britain's official satellite television provider, BSB had high hopes. The company planned to provide a mixture of highbrow programming and popular entertainment, from arts and opera to blockbuster movies and music videos. The service would also be technically superior, broadcasting in the D-MAC (Multiplexed Analogue Components
Multiplexed Analogue Components
Multiplexed Analogue Components was a satellite television transmission standard, originally proposed for use on a Europe-wide terrestrial HDTV system, although it was never used terrestrially.- Technical overview :...

 type D) system dictated by European Union regulations with potentially superior picture sharpness, digital stereo sound and the potential to show widescreen programming, rather than the existing PAL
PAL
PAL, short for Phase Alternating Line, is an analogue television colour encoding system used in broadcast television systems in many countries. Other common analogue television systems are NTSC and SECAM. This page primarily discusses the PAL colour encoding system...

 system.

In contrast to the ambitious and costly technology required by BSB in accordance with its IBA licence, Sky chose to use the European Astra
Astra 1A
Astra 1A was the first satellite launched and operated by SES . During its early days, it was often referred to as the Astra Satellite, as SES only operated one satellite originally....

 satellite
Satellite
In the context of spaceflight, a satellite is an object which has been placed into orbit by human endeavour. Such objects are sometimes called artificial satellites to distinguish them from natural satellites such as the Moon....

 and broadcast in PAL with analogue sound; this system would require 60cm (24") dishes, although 80cm versions were recommended for Scotland and parts of the north of England. BSB criticised Sky's proposals, claiming that the PAL pictures would be too degraded by satellite transmission, and that in any case, BSB would broadcast superior programming. SES Astra
SES Astra
Astra is the name for the geostationary communication satellites, both individually and as a group, which are owned and operated by SES S.A., a global satellite operator based in Betzdorf, in eastern Luxembourg. The name is sometimes also used to describe the channels broadcasting from these...

 had no regulatory permission to broadcast, had plans (initially) for only one satellite with no backup and the European satellite launch vehicle Ariane suffered repeated failures. However SES Astra
SES Astra
Astra is the name for the geostationary communication satellites, both individually and as a group, which are owned and operated by SES S.A., a global satellite operator based in Betzdorf, in eastern Luxembourg. The name is sometimes also used to describe the channels broadcasting from these...

 used the resulting delay time to re-engineer the satellite to reduce the dish size needed which would otherwise have been larger than 60cm (24").

To distance itself from Sky and its dish antennas, BSB announced a new type of flat-plate satellite antenna called a "Squarial
Squarial
The Squarial was a satellite antenna used for reception of the now defunct British Satellite Broadcasting television service. The Squarial was a flat plate satellite antenna, built to be unobtrusive and unique. BSB were counting on the form factor of the antenna to clearly differentiate themselves...

" (i.e., "square aerial"). The illustrative model Squarial shown to the press was a dummy and BSB commissioned a working version which was under 45cm (18") wide. A conventional dish of the same diameter was also available. The company had serious technical problems with the development of ITT's D-MAC silicon chips needed for its MAC receivers. BSB was still hoping to launch that September, but eventually had to admit that the launch would be delayed. In the event, Sky Television began its four-channel service of general entertainment (Sky Channel), movies (Sky Movies
Sky Movies
Sky Movies is the collective name for the premium subscription television movie channels operated by Sky Television, and later British Sky Broadcasting. It has around 5 million subscribers, via satellite, cable and IPTV in the UK and Ireland...

), sport (Eurosport
Eurosport
Eurosport is a pan-European television sport network operated by French broadcaster TF1 Group. The network of channels are available in 59 countries, in 20 different languages providing viewers with European and international sporting events...

) and rolling news (Sky News
Sky News
Sky News is a 24-hour British and international satellite television news broadcaster with an emphasis on UK and international news stories.The service places emphasis on rolling news, including the latest breaking news. Sky News also hosts localised versions of the channel in Australia and in New...

) on 5 February 1989.

Meanwhile, since no other consortium had come forward to bid for the two spare channel licences, BSB now had a licence to operate five channels rather than just three. The company continued to promote its Squarial with the slogan It's Smart to be Square.

BSB's five satellite channels were:
  • The Movie Channel
    The Movie Channel (UK)
    For the unrelated American service, see The Movie ChannelThe Movie Channel was a British television channel, which only showed movies. Launched on BSB in 1990, The Movie Channel was a predecessor of some of the Sky Movies channels, having survived the merger with Sky Television, another satellite...

  • The Sports Channel
    Sky Sports
    Sky Sports is the brand name for a group of sports-oriented television channels operated by the UK and Ireland's main satellite pay-TV company, British Sky Broadcasting. Sky Sports is the dominant subscription television sports brand in the United Kingdom and Ireland...

  • Galaxy
  • The Power Station
  • Now

Competition

Sky's head start
Head start (positioning)
In positioning, a head start is a start in advance of the starting position of others in competition, or simply toward the finish line or desired outcome...

 over BSB proved that the PAL system would give adequate picture quality and that many viewers would be happy to watch Sky's more populist output as opposed to waiting for the promised quality programming pledged by BSB. Sky had also launched their multi-channel service from studios at an industrial estate in Isleworth
Isleworth
Isleworth is a small town of Saxon origin sited within the London Borough of Hounslow in west London, England. It lies immediately east of the town of Hounslow and west of the River Thames and its tributary the River Crane. Isleworth's original area of settlement, alongside the Thames, is known as...

, west London with a 10-year lease on SES Astra
SES Astra
Astra is the name for the geostationary communication satellites, both individually and as a group, which are owned and operated by SES S.A., a global satellite operator based in Betzdorf, in eastern Luxembourg. The name is sometimes also used to describe the channels broadcasting from these...

 transponders for an estimated £50 million without backup. BSB, on the other hand, would operate from more expansive headquarters at Marco Polo House
Marco Polo House
Marco Polo House is a large marble- and glass-clad office building at 346 Queenstown Road facing Battersea Park in the London Borough of Wandsworth. It was built in 1987, to a design by postmodernist architect Ian Pollard....

 in Battersea
Battersea
Battersea is an area of the London Borough of Wandsworth, England. It is an inner-city district of South London, situated on the south side of the River Thames, 2.9 miles south-west of Charing Cross. Battersea spans from Fairfield in the west to Queenstown in the east...

, south London with construction and launch of its own satellites costing an estimated £200 million.

When BSB finally went on air in March 1990, 13 months after Sky, the company's technical problems were resolved and its programming was critically acclaimed. However its D-MAC receivers were more expensive than Sky's PAL equivalents and incompatible with them. Many potential customers compared the competition between the rival satellite companies to the format war
Format war
A format war describes competition between mutually incompatible proprietary formats that compete for the same market, typically for data storage devices and recording formats for electronic media. It is often characterized by political and financial influence on content publishers by the...

 between VHS
VHS
The Video Home System is a consumer-level analog recording videocassette standard developed by Victor Company of Japan ....

 and Betamax
Betamax
Betamax was a consumer-level analog videocassette magnetic tape recording format developed by Sony, released on May 10, 1975. The cassettes contain -wide videotape in a design similar to the earlier, professional wide, U-matic format...

 home video recorders and chose to wait and see which company would win outright as opposed to buying potentially obsolete equipment.

Merger

In October 1990, an enterprising manufacturer came up with a dual satellite dish that could be used to receive both Sky and BSB services, although separate receivers would still be required - the following month this technology became effectively obsolete.

Both companies had begun to struggle with the burden of huge losses, escalating debts and ongoing startup costs. In November 1990, a 50:50 merger was announced to form a single company, operating as British Sky Broadcasting (BSkyB), but marketed as Sky. The merger may have saved Sky financially as it had very few major advertisers at the time, so acquiring BSB's healthier advertising contracts and equipment helped to solve the company's problems.

Satellites

As the company focused on the Astra system, which was not subject to IBA regulation, the Marcopolo satellites were withdrawn and eventually sold (Marcopolo I in December 1993 to NSAB of Sweden and Marcopolo II in July 1992 to Telenor
Telenor
Telenor Group is the incumbent telecommunications company in Norway, with headquarters located at Fornebu, close to Oslo. Today, Telenor Group is mostly an international wireless carrier with operations in Scandinavia, Eastern Europe and Asia, working predominantly under the Telenor brand...

 of Norway). Sky News
Sky News
Sky News is a 24-hour British and international satellite television news broadcaster with an emphasis on UK and international news stories.The service places emphasis on rolling news, including the latest breaking news. Sky News also hosts localised versions of the channel in Australia and in New...

 began broadcasting services to Scandinavia from the Thor satellites.

NSAB operated Marcopolo I (as Sirius 1) until successfully sending it to a safe disposal orbit in 2003 as it reached the normal end of its operational life when fuel ran out, also Marcopolo II was operated (as Thor 1) until 2002 and disposed of successfully.

After the merger BSB DMAC receivers were sold off cheaply and some enthusiasts modified them to allow reception of D2MAC services available on other satellites. BSB receivers, Ferguson in particular, could be modified by replacing a microprocessor. Upgrade kits from companies such as Trac Satellite allowed retuning whilst other kits allowed fully working menu systems and decoding of 'soft' encrypted channels, although this required the receiver to have one of the later MAC chipsets. Some kits even included smart card readers and full D2MAC decoding capability.

Locations

The Marco Polo House
Marco Polo House
Marco Polo House is a large marble- and glass-clad office building at 346 Queenstown Road facing Battersea Park in the London Borough of Wandsworth. It was built in 1987, to a design by postmodernist architect Ian Pollard....

 headquarters were vacated, leading to redundancy for most BSB staff with only a few moving to work at Sky's HQ in Isleworth. The BSB building was retained by the new company, and in 1993 became the home of shopping channel QVC
QVC
QVC is a multinational corporation specializing in televised home shopping. Founded in 1986 by Joseph Segel in West Goshen Township, Pennsylvania, United States, QVC broadcasts in five countries as QVC US, QVC UK, QVC Germany, QVC Japan and – QVC Italy to 200 million households...

 when its UK channel launched. Broadcasting platform ITV Digital
ITV Digital
ITV Digital was a British digital terrestrial television broadcaster, which launched a pay-TV service on the world's first digital terrestrial television network as ONdigital in 1998 and briefly re-branded as ITV Digital in July 2001, before the service ceased in May 2002. Its main shareholders...

 moved into part of the building as part of the settlement that saw Sky forced out of the original company.

Channels

Following the takeover, Sky moved quickly to rationalise the combined channels it now owned:
  • The entertainment channel Galaxy was closed with its transponders handed over to Sky One.
  • The factual, lifestyle and arts channel Now was replaced in the most part with Sky News
    Sky News
    Sky News is a 24-hour British and international satellite television news broadcaster with an emphasis on UK and international news stories.The service places emphasis on rolling news, including the latest breaking news. Sky News also hosts localised versions of the channel in Australia and in New...

    , although as some arts programming was still to be shown, a short term opt-out service called Sky Arts was launched for broadcast on the Marco Polo transponders at weekends.
  • Music channel The Power Station remained on air until 8 April 1991 and replaced by Sky Movies
    Sky Movies
    Sky Movies is the collective name for the premium subscription television movie channels operated by Sky Television, and later British Sky Broadcasting. It has around 5 million subscribers, via satellite, cable and IPTV in the UK and Ireland...

    .
  • The Movie Channel
    The Movie Channel (UK)
    For the unrelated American service, see The Movie ChannelThe Movie Channel was a British television channel, which only showed movies. Launched on BSB in 1990, The Movie Channel was a predecessor of some of the Sky Movies channels, having survived the merger with Sky Television, another satellite...

     and The Sports Channel
    Sky Sports
    Sky Sports is the brand name for a group of sports-oriented television channels operated by the UK and Ireland's main satellite pay-TV company, British Sky Broadcasting. Sky Sports is the dominant subscription television sports brand in the United Kingdom and Ireland...

     remained on air.


Technically, two BSB channels still exist. The Movie Channel kept its name until 1997, being briefly rebranded as "Sky Movies Screen 2", Sky MovieMax and then Sky Movies 2. The channel is now Sky Movies
Sky Movies
Sky Movies is the collective name for the premium subscription television movie channels operated by Sky Television, and later British Sky Broadcasting. It has around 5 million subscribers, via satellite, cable and IPTV in the UK and Ireland...

 Showcase. The Sports Channel retained its name for a while, then was rebranded to Sky Sports, and rebranded to its current name, Sky Sports 1, in 1996, when Sky Sports 3 was launched.

Regulatory context

A new TV transmission system, Multiplexed Analogue Components
Multiplexed Analogue Components
Multiplexed Analogue Components was a satellite television transmission standard, originally proposed for use on a Europe-wide terrestrial HDTV system, although it was never used terrestrially.- Technical overview :...

 (MAC), was originally developed for high definition TV but European TV manufacturers developed patented variants and successfully lobbied regulators such that it was adopted by the EU as the standard for all direct broadcast satellites.

This had the effect that the low cost non-European TV manufacturers would not only have to pay royalties to the EU manufacturers but would also not have direct access to the technology and hence would always be behind with new developments.

In the UK, the Independent Broadcasting Authority
Independent Broadcasting Authority
The Independent Broadcasting Authority was the regulatory body in the United Kingdom for commercial television - and commercial/independent radio broadcasts...

 developed a variant D-MAC
D-MAC
Among the family of MAC or Multiplexed Analog Components systems for television broadcasting, D-MAC is a reduced bandwidth variant designed for transmission down cable....

 which had marginal audio channel improvements, and insisted on its use by the satellite service to be licensed by itself. On the continent of Europe, satellite TV manufacturers standardised on another variant, D2-MAC, which used less bandwidth and was compatible with the extensive existing European cable systems.

With the launch of BSB the IBA became a member of the secret "MAC Club" of European organisations which owned patents on MAC variants and had a royalty sharing agreement for all TV and set top boxes sold.

The IBA was not directed to be an "economic regulator", so the free market in lower power satellite bandwidth satellites (such as SES-ASTRA) leveraged the benefits of the existing lower cost PAL
PAL
PAL, short for Phase Alternating Line, is an analogue television colour encoding system used in broadcast television systems in many countries. Other common analogue television systems are NTSC and SECAM. This page primarily discusses the PAL colour encoding system...

 transmissions with pre-existing set-top box technology. The IBA was rendered helpless and Rupert Murdoch made a voluntary agreement to adhere to those Broadcasting Standards Commission rules relating to non-economic matters, such as the technology used.

Ironically the past-deadline encryption system in the DMAC silicon chip technology was one primary reason for BSB having to merge with Sky and hence the Far Eastern TV manufacturers had largely unfettered access to the market when MAC was dropped in favour of PAL. Sky launched with these free-to-air PAL receivers, adding the VideoCrypt technology when the DMAC system was dropped and Sky Sports
Sky Sports
Sky Sports is the brand name for a group of sports-oriented television channels operated by the UK and Ireland's main satellite pay-TV company, British Sky Broadcasting. Sky Sports is the dominant subscription television sports brand in the United Kingdom and Ireland...

 and Sky Multichannels
Sky Multichannels
Sky Multichannels was a package of analogue television channels offered by BSkyB on the Astra satellites at 19.2° east. The service started on 1 September 1993 based on the idea from the then chief executive officer, Sam Chisholm and Rupert Murdoch, of adjusting BSkyB's business strategy to include...

was launched.

BSB's shareholders and News International (Murdoch) all made huge profits on their investments, the 50:50 merged venture had an effective multi channel quasi monopoly on UK satellite pay TV.

From a UK perspective British Satellite Broadcasting's existence prevented 100% of these profits being made by News International, reducing Murdoch's ability to influence government policy.

At one stage of the saga, News International was facing dismemberment at the hands of its bankers.
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