Virtuous circle powers BSkyB ahead
Monday 25 September 1995
News that his 40 per cent-owned BSkyB, the satellite broadcaster, is campaigning to replace Independent Television News as the dedicated supplier of news for the ITV companies, is further testimony to Mr Murdoch's ever- expanding ambitions.
Last week, BSkyB came of age: now a pounds 6.7bn public company, with stellar profits and rising revenues, the company joined the illustrious FT-SE 100, the list of top equities, following the sale of Pearson's 9.7 per cent stake and the resulting increase in the number of shares which are held publicly.
Sam Chisholm, chief executive and long-time Murdoch confidante, says: "The truth is, anybody could have done it. But only Murdoch had the vision and the guts."
Launched in 1989, beaming signals from the Astra satellite to UK homes equipped with a satellite dish, Sky Television penetrated the first chink in the armour of Britain's coddled television monopolies.
The move drowned Mr Murdoch's other companies, which include News International, in red ink. By the time Sky was merged with its only competition, the anaemic British Satellite Broadcasting, in 1990, there was even talk among his backers of pulling the plug.
Mr Chisholm was enticed from Australia, where he ran Mr Murdoch's Channel 9, in time to oversee the merger of BSB and Sky, creating BSkyB.
A rough few years followed, during which Mr Chisholm introduced the policies that would give BSkyB its legs: long-term supply contracts with Hollywood studios, exclusive sports deals (including pounds 304m for the Premier League) and the transition from "free" TV for anyone with a dish to scrambled, subscription-only services.
The concern from BSkyB's competitors is now whether anyone can catch up. Most analysts are bullish, predicting strong turnover growth in coming years, as the broadcaster aggressively adds new channels - the Disney Channel, the History Channel and European Business News all arrive in the next few weeks. The new channels trigger an increase in subscription prices (which means additional revenue), and expands its overall share of advertising.
While there may be some slowdown in the number of satellite dishes sold in the next five years - those who want them have probably got them - there is potential in the number of UK homes signing up for cable, which also delivers BSkyB's channels. The broadcaster now has 3m direct-to-home subscribers, and another million via cable.
Moreover, digital television is expected to underpin demand for commercial TV by the end of the decade. Provided that BSkyB moves aggressively into digital - and it has already reserved capacity on Astra's digital satellite service, which is ready to beam upward of 200 channels into the UK - then the company looks well positioned.
Mr Chisholm says: "It is our goal to have 10 million subscribers by 2000, and we are confident we will reach it." Of these, perhaps 6-7 million are likely to be cable subscribers.
To keep revenues growing, and to attract more viewers, BSkyB is sticking to a tested strategy. Year by year, it has been adding new programming, and steadily increasing subscription prices. New programming brings in new viewers, and margins improve. "It is a virtuous circle," Mr Chisholm says.
- 2 The man who filmed the Freddie Gray video has been arrested at gunpoint
- 3 How the language you speak changes your view of the world
- 4 The top 50 cities for young people to live in
General Election 2015: Fishing is on Nigel Farage's mind as he casts a line to the disaffected of Grimsby
Oxygen-starved 'dead zones' with no marine life up to 100-miles long discovered in the Atlantic Ocean
The man who filmed the Freddie Gray video has been arrested at gunpoint
Indonesia executions: Death row British grandmother Lindsay Sandiford will refuse to wear a blindfold when she faces firing squad
Russian warships accused of 'chasing away' Swedish vessel to prevent Baltic States from achieving energy independence
Over 50,000 families shipped out of London boroughs in the past three years due to welfare cuts and soaring rents
EU asylum policy is 'a direct threat to our civilisation', says Nigel Farage
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: SNP and its activists 'openly racist' towards the English, Farage says
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
Schools forced to act as 'miniature welfare states' with teachers buying underwear and even haircuts for poor pupils
iJobs Money & Business
£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...
£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...
£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...
£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...