Virtuous circle powers BSkyB ahead

The critics said it could not be done. Then they said it had been done too well. The quite extraordinary growth of cable and broadcaster British Sky Broadcasting from a glint in the eye of media baron Rupert Murdoch to the country's most profitable television company has attracted its fair share of derision, condemnation and, finally, fear and grudging respect from its detractors.

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.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
The Ridiculous Six has been produced by Adam Sandler, who also stars in it
filmNew controversy after nine Native American actors walked off set
Ed Miliband, Nick Clegg and David Cameron appeal to the audience during the Question Time special
Danny Jones was in the Wales squad for the 2013 World Cup
rugby leagueKeighley Cougars half-back was taken off after just four minutes
Life and Style
The original ZX Spectrum was simple to plug into your TV and get playing on
techThirty years on, the ZX Spectrum is back, after a fashion
Tiger Woods and Lindsey Vonn are breaking up after nearly three years together
peopleFormer couple announce separation in posts on their websites
ebooksA celebration of British elections
Life and Style
Google celebrates Bartolomeo Cristofori's 360th birthday
techGoogle Doodle to the rescue
Arts and Entertainment
Haunted looks: Matthew Macfadyen and Timothy Spall star in ‘The Enfield Haunting’
tvThe Enfield Haunting, TV review
The Mattehorn stands reflected in Leisee lake near Sunnegga station on June 30, 2013 near Zermatt, Switzerland
Michelle Dockery plays Lady Mary in Downton Abbey
peopleBut who comes top of the wish list?
Miriam Gonzalez Durantez, right, with Lib Dem candidate Jane Dodds in Newtown, Powys, as part of her tour in support of the party’s female candidates
general electionNick Clegg's wife has impressed during the campaign
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Recruitment Genius: Online Customer Service Administrator

£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...

Recruitment Genius: Digital Marketing Executive

£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

Everyone is talking about The Trews

Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living