name	British Sky Broadcasting Group plc
logo
type	Public limited company
traded as
predecessor	Sky TelevisionBritish Satellite Broadcasting
foundation	November 1990
location city	Osterley, London
location country	United Kingdom
latitude	51.48682
longitude	-0.32817
area served	United Kingdom and Republic of Ireland
key people
industry	MediaSatellite broadcastingTelecommunications
revenue	£5,912 million (2010)
operating income	£1,096 million (2010)
net income	£878 million (2010)
num employees	16,500 (2010)
homepage
footnotes	}}

British Sky Broadcasting Group plc (commonly known as BSkyB; trading as Sky) is a satellite broadcasting company headquartered in London, United Kingdom with operations in the United Kingdom and the Republic of Ireland.

Formed in 1990 by the equal merger of Sky Television and British Satellite Broadcasting, BSkyB is the largest pay-TV broadcaster in the United Kingdom with over 10 million subscribers.

BSkyB is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index. News Corporation owns a controlling 39.1 percent stake in the company.

History

1989

The Astra satellite network began with the launch of Astra 1A in 1989. Sky Television plc was the first customer of Astra and leased four transponders on Astra 1A ahead of its launch. With the launch of more Astra satellites from 1991 onward, Sky was able to begin expanding its services, (the Astra satellites were all orbiting co-located at 19.2° east so they could be received using the same satellite dish).

1990

British Sky Broadcasting was formed by the equal merger of Sky Television and British Satellite Broadcasting in 1990. Both companies had begun to struggle financially and were both suffering terrible financial losses. Marco Polo House was sold and British Satellite Broadcasting's channels were largely scrapped in favour of Sky Television's channels. (Marcopolo I in December 1993 to NSAB of Sweden; and Marcopolo II in July 1992 to Telenor of Norway. Both Sky Television and British Satellite Broadcasting had one HS376 in orbit at the time.) The merger of both companies saved Sky financially; in the beginning, Sky Television had very few major advertisers, acquiring British Satellite Broadcasting's healthier advertising contracts and equipment solved the companies' problems.

1998

The launch of the Astra 2A satellite at a new orbital position, 28.2° east, in 1998 (subsequently followed by more Astra satellites as well as Eutelsat's Eurobird 1 at 28.5°E), enabled the company to launch a new all-digital service, Sky, with the potential to carry hundreds of television and radio channels. Sky does not own any of the satellites it has used since withdrawing services from the Marcopolo craft; the Astra satellites are owned and operated by Astra (and Eurobird 1 by Eutelsat).

2010

Sky’s direct-to-home satellite service became available in ten million homes in 2010, the first pay-TV platform in Europe to achieve the milestone. Confirming the target had been reached; the satcaster said the 36% of households in the UK and Ireland represented over 25 million people. The target was first announced in August 2004, since when an additional 2.4 million customers have signed on Sky’s dotted line. It had become the subject of much debate in media circles as to whether the level could actually be reached amid a background of plateauing subscriber numbers elsewhere in Europe.

2011

BSkyB announced that they were moving some channels further up the listings of their electronic programming guide. According to Broadband TV News, this is the biggest reshuffle in EPG places for over a decade, with MTV, Comedy Central, Universal, Syfy, FX, and 40 HD channels moving to more prominent places. As of July 13, News Corporation have dropped their bid for 100% of BSkyB in the light of the News of the World phone hacking scandal.

Corporate

Management

News Corporation currently has a 39.1% stake in BSkyB. News Corp also fully owns Sky Italia, about 78% of New Zealand's SKY Network Television Limited and b.net of Croatia and Montenegro.

The first CEO of BSkyB was Sam Chisholm, who was CEO of Sky TV before the merger. Chisholm served in this position until 1997. He was followed by Mark Booth who was credited with leading the company through the introduction of Sky. Tony Ball was appointed in 1999 and completed the company's analogue to digital conversion. He is also credited with returning the company to profit and bringing subscriber numbers to new heights. In 2003 Ball announced his resignation and James Murdoch, son of Rupert Murdoch was announced as his successor. This appointment caused allegations of nepotism from shareholders.

On 7 December 2007 it was announced that Rupert Murdoch would be stepping down as BSkyB's Non-Executive Chairman and would be replaced by his son, James. It was also announced that James would be stepping down as CEO of BSkyB and will be replaced by Jeremy Darroch.

News Corporation takeover proposal

The News Corporation takeover bid for BSkyB was launched in June 2010, and withdrawn in July 2011 following the News International phone hacking scandal. News Corporation already owned 39.1% of BSkyB, and held on to its stake following the collapse of the takeover bid.

Subsidiaries

British Sky Broadcasting Ltd Operating company for the Sky pay-television service.

Sky Subscriber Services LtdThe original Sky Television plc, now a holding company

Sports Internet Group LtdSports content and online betting services.

Mykindaplace.comBeing both an agency and a media owner, run many successful sites. – Now defunct

Aura Sports LtdMedia Sales Agency, sells advertising on the majority of premiership football club websites, as well as other major sports.

Aura Play Ltd Another Media Sales Agency, sells advertising across a number of websites in the music and entertainment sector.

Sky Ireland Operating company for Sky pay-television service in the Republic of Ireland.

Living TV Group A British television content arm, operating a number of channels.

Ventures

A&E; Television Networks#AETN UK

Attheraces Holdings Limited (48.5%) – with [[Arena Leisure. Operates At the Races.

Australian News Channel Pty Limited (33.3%) – with Seven Network and Nine Entertainment Co.. Operates Sky News Australia.

Chelsea Digital Media (35%) – with Chelsea FC. Operates Chelsea TV.

Partnerships

Comedy Central (UK) (25%) – with Paramount British Pictures, part of Viacom

Stake in ITV

ITV plc has been the subject of a flurry of rumoured take-over and merger bids since it was formed. For example, on 9 November 2006, NTL announced that it had approached ITV plc about a proposed merger. The merger was effectively blocked by BSkyB on 17 November 2006 when it controversially bought a 17.9% stake in ITV plc for £940 million, a move that attracted anger from NTL shareholder Richard Branson and an investigation from media and telecoms regulator Ofcom. On 6 December 2006, NTL announced that it had complained to the Office of Fair Trading about BSkyB's move. NTL stated that it had withdrawn its attempt to buy ITV plc, citing that it did not believe that there was any possibility to make a deal on favourable terms. At the same time as the NTL bid, RTL Group, the then-owner of Channel 5, was also rumoured to be preparing a bid for ITV plc, with the possibility of a stock-swap with BSkyB. The plan would see RTL Group acquiring BSkyB's stake in ITV plc (with the aim of further acquisitions of shares in the future) in exchange for BSkyB taking full control of Channel 5. However, no move materialised and RTL Group sold Channel 5 to Richard Desmond's Northern & Shell in July 2010.

Finance

+ Turnover and profit or loss, by fiscal year
Year ended	Turnover (£m)	Profit/(loss)before tax (£m)	Net profit/(loss)(£m)
30 June 2010	5,912	1,173	878
30 June 2009	5,359	456	259
30 June 2008	4,952	60	(127)
30 June 2007	4,551	815	499
30 June 2006	4,148	798	551
30 June 2005	4,048	631	425
30 June 2004	3,656	480	322
30 June 2003	3,186	128	190
30 June 2002	2,776	(1,276)	(1,383)
30 June 2001	2,306	(515)	(539)
30 June 2000	1,847	(263)	(272)
30 June 1999	1,545	(389)	(285)
30 June 1998	1,434	271	249
30 June 1997	1,270	314	288
30 June 1996	1,008	257	–
30 June 1995	778	155	–
30 June 1994	550	93	–
30 June 1993	380	(76)	–
30 June 1992	233	(188)	–
30 June 1991	93	(759)	–

Services

Digital Terrestrial Television

BSkyB initially faced competition from the ONdigital digital terrestrial television service (later renamed ITV Digital). ITV Digital failed for numerous reasons, including, but not limited to numerous administrative and technical failures, nervous investors after a large down-turn in the advertising market and the dot com crash, and BSkyB's aggressive marketing and domination of premium sporting rights.

Sky was more receptive to ITV Digital's free-to-air replacement, Freeview, in which it holds an equal stake with the BBC, ITV, Channel 4 and National Grid Wireless. Prior to October 2005, three BSkyB channels were available on this platform: Sky News, Sky Three, and Sky Sports News. Initially BSkyB provided Sky Travel to the service. However, this was replaced by Sky Three on 31 October 2005, allowing BSkyB to air its exclusive licensed content with delays of between 12–18 months from their original air dates on Sky One.

Terrestrial television companies currently have limited bandwidth. This means that, at present, there is little or no option to offer HD services, until after the final analogue television services are switched off in 2012 freeing up substantial bandwidth.

In a response to the push towards Free to Air services such as Freesat and Freeview, BSkyB has marketed its own free to view offering (Freesat from Sky).

On 8 February 2007, Sky announced its intention to replace its three free-to-air digital terrestrial channels with four subscription channels. It was proposed that these channels would offer a range of content from the Sky portfolio including sport (including English Premiership Football), movies, entertainment and news. The announcement came a day after Setanta Sports confirmed that it would launch in March as a subscription service on the digital terrestrial platform, and on the same day that NTL's services re-branded as Virgin Media. However, industry sources believe Sky will be forced to shelve plans to withdraw its channels from Freeview and replace them with subscription channels, due to possible lost advertising revenue.

Video on demand

Sky is facing increased competition from telecommunications providers delivering pay television services over existing telephone lines using ADSL. Such providers are potentially able to offer "triple-play" or "quad-play" packages combining land-line telephone, broadband Internet, mobile telephone and pay television services.

In the final quarter of 2006, BT, the UK's biggest Telephone company, launched BT Vision. The BT Vision set-top box, provides true Video on Demand (VoD) over BT's telephone lines using ADSL. The set-top-box complements the VoD component by providing access to the Freeview digital terrestrial television service. TalkTalk TV also offers an IPTV service with many channels, including Sky's channels, delivered to a set top box over ADSL.

To compete with these providers, in October 2005, BSkyB bought the broadband Internet Service Provider Easynet for £211 million. This acquisition allowed BSkyB to start offering its "Sky Anytime on PC" service as well as a "triple play" package combining satellite television, land-line telephone and Broadband service. Sky also offers some streaming live TV channels to a computer using Microsoft's Silverlight.

Sky Anytime+, a true Video on Demand service was rolled out to existing Sky set-top boxes throughout 2010, the service is delivered via ADSL to Sky Broadband subscribers.

On July 6, 2011, Sky Player and Sky Mobile TV services were merged and rebranded as Sky Go.

Xbox 360

On 29 May 2009 it was confirmed that Sky Player would be made available via Microsoft's Xbox 360 games console. Included is live streaming of various television channels, on-demand movies and live sports programming. This was a worldwide first for Microsoft, and is only available in the UK and Ireland.

Content

Sports

BSkyB's purchase of broadcast rights for major sporting events, most importantly Premiership football, has been the bedrock of its success. The company paid over £300 million for the Premier League rights, beating the BBC and ITV, and has had a monopoly of live matches since the inception of the Premier League in 1992. Murdoch has described sport as a "battering ram" for pay-television, providing a strong customer base.

However, following a lengthy legal battle with the European Commission, which deemed the exclusivity of the rights to be against the interests of competition and the consumer, BSkyB's monopoly came to an end from the 2007–08 season. In May 2006 the Irish broadcaster Setanta Sports was awarded two of the six Premiership packages that the English FA offered to broadcasters. Sky picked up the remaining four for £1.3 billion.

BT offer a pay per view service of selected Premier League matches through their BT Vision service, and Virgin Media offer free highlights on the Virgin Media website.

High Definition

Sky launched its HDTV service, Sky+ HD, on 22 May 2006. Prior to its launch, Sky claimed that 40,000 people had registered to receive the HD service. In the week before the launch, rumours started to surface that Sky was having supply issues with its Set Top Box (STB) from manufacturer Thomson. On Thursday 18 May 2006, and continuing through the weekend before launch, people were reporting that Sky had either cancelled or rescheduled its installation. Finally, the BBC reported that 17,000 customers had yet to receive the service due to failed deliveries. The event was widely seen as an embarrassment for Sky, who until that point, had been extremely conservative in new service launch schedules. The supply issues were resolved shortly after the initial launch date.

According to figures published by Sky, there are 2,082,000 subscribers to the Sky+ HD service as of 30 December 2009.

3D

On 28 January 2010, Sky announced that it would begin to broadcast programmes in 3D by April 2010. This action will include new 3D channels, including a Sky Sports 3D and Sky Movies 3D. Sky previously experimented with 3D broadcasting by broadcasting an Arsenal vs Manchester United football game live in 3D in nine pubs situated throughout the United Kingdom and Ireland

Restrictions

Sky subscribers in the Republic of Ireland have a different choice of channels compared to Northern Ireland or subscribers in Great Britain. The standard Irish channels RTÉ One, RTÉ Two, TV3, TG4 and 3e are available to all Irish subscribers and unavailable by any other means on Satellite. However only BBC One Northern Ireland, BBC Two Northern Ireland and Channel 4 are available to Irish Sky subscribers. Free to air channels like the ITV family of channels, BBC Three, BBC Four, BBC News and Channel Five can only be tuned via the Other Channels section. As these channels are only available via the Other Channels section it is not possible for Irish Sky+ or Sky+ HD subscribers to record programmes from these channels onto their boxes. Sky pays the BBC for the right to include BBC One and BBC Two NI on the Irish EPG. Northern Ireland subscribers in some packages get RTÉ One, RTÉ Two and TG4, since the signing of the Good Friday agreement to let RTÉ broadcast there.

Products

Sky utilizes the VideoGuard pay-TV scrambling system owned by NDS, a Permira/News Corporation company. There are tight controls over use of VideoGuard decoders; they are not available as stand-alone DVB CAMs (Conditional Access Modules). BSkyB has design authority over all digital satellite receivers capable of receiving their service. The receivers, though designed and built by different manufacturers, must conform to the same user interface look-and-feel as all the others. This extends to the Personal video recorder (PVR) offering (branded Sky+). BSkyB initially charged additional subscription fees for using a Sky+ PVR with their service; waiving the charge for subscribers whose package included two or more premium channels. This changed as from 1 July 2007, and now customers that have Sky+ and subscribe to any Sky subscription package get Sky+ included at no extra charge. Customers that don't subscribe to Sky's channels can still pay a monthly fee to enable Sky+ functions. In January 2010 Sky discontinued the Sky+ Box, limited the standard Sky Box to Multiroom upgrade only and started to issue the Sky+HD Box as standard, thus giving all new subscribers the functions of Sky+. In February 2011 Sky discontinued the non-HD variant of their Multiroom box, offering a smaller version of the SkyHD box without Sky+ functionality. In September 2007, Sky launched a new TV advertising campaign targeting Sky+ at women. As of 31 March 2008, Sky have 3,393,000 Sky+ users.

Criticism and controversies

Competition

On 12 July 2011, former Prime Minister, Gordon Brown claimed that BSkyB's majority owner - News Corporation attempted to affect government policy with regards to the BBC in pursuit of their own commercial interests (i.e. BSkyB). He went further, in a speech in Parliament on 13 July 2011, stating:

"Mr James Murdoch, which included his cold assertion that profit not standards was what mattered in the media, underpinned an ever more aggressive News International and BSkyB agenda under his and Mrs Brooks’ leadership that was brutal in its simplicity. Their aim was to cut the BBC licence fee, to force BBC online to charge for its content, for the BBC to sell off its commercial activities, to open up more national sporting events to bids from BSkyB and move them away from the BBC, to open up the cable and satellite infrastructure market, and to reduce the power of their regulator, Ofcom. I rejected those policies."

On July 13, 2011, MP Chris Bryant stated to the House of Commons, in the Parliamentary Debate on the Rupert Murdoch and News Corporation Bid for BSkyB that the company was anti-competitive:

"The company has lots of technological innovation that only a robust entrepreneur could to bring to British society, but it has also often been profoundly anti-competitive. I believe that the bundling of channels so as to increase the profit and make it impossible for others to participate in the market is anti-competitive. I believe that the way in which the application programming interface—the operating system—has been used has been anti-competitive and that Sky has deliberately set about selling set-top boxes elsewhere, outside areas where they have proper rights. If one visits a flat in Spain where a British person lives, one finds that they mysteriously manage to have a Sky box there even though it is registered to a house in the United Kingdom."

Virgin Media

Virgin Media (Re-branded in 2007 from NTL:Telewest) is a major competitor to Sky in the satellite broadcasting market. Virgin Media's cable network was also formed by numerous mergers and acquisitions over the last decade, with different cable companies having used different types of network and technology in their areas.

Virgin Media currently own a 50% stake in the UKTV network and previously owned Sit-up Ltd and Virgin Media Television, the former content arm of Telewest, then known as Flextech Television.

Like Sky, Virgin Media offers a high-definition television (HDTV) capable set top box, although from 30 November 2006 until 30 July 2009 it only carried one linear HD channel, BBC HD, after the conclusion of the ITV HD trial. Virgin has claimed that other HD channels were "locked up" or otherwise withheld from their platform, although Virgin did in fact have an option to carry Channel 4 HD in the future. Nonetheless, the linear channels were not offered, Virgin instead concentrating on its Video On Demand service to carry a modest selection of HD content. Virgin has nevertheless made a number of statements over the years, suggesting that more linear HD channels are on the way.

In Q3 2009 Virgin announced that it was making more linear HD channels available on its platform, including FX HD, MTVN HD, Channel 4 HD, and National Geographic HD. As expected, Living HD followed shortly.

In 2007, BSkyB and Virgin Media became involved in a dispute over the carriage of Sky channels on cable TV. The failure to renew the existing carriage agreements negotiated with NTL and Telewest resulted in Virgin removing the basic channels from the network on 1 March 2007. Virgin claimed that Sky had substantially increased the asking price for the channels, a claim which Sky denied, on the basis that their new deal offered "substantially more value" by including HD channels and Video On Demand content which was not previously carried by cable.

In response, Sky ran a number of TV, radio and print advertisements claiming that Virgin media 'doubted the value' of the channels concerned, at first urging Virgin customers to call their cable operator to show their support for Sky, but later urging Virgin customers to migrate to Sky to continue receiving the channels. The broadcasting regulator Ofcom subsequently found these commercials in breach of their code.

The availability (at an extra charge) of Sky's premium sport and movie services was not affected by the dispute. This impasse continued for twenty-one months, with both companies initiating High Court proceedings. Amongst Virgin's claims to the court (denied by Sky) were that Sky had unfairly reduced the amount which it paid to VMTV for the carriage of Virgin's own channels on satellite.

Eventually, on 4 November 2008 it was announced that an agreement had been struck for Sky's Basic channels – including Sky1, Sky2, Sky3, Sky News, Sky Sports News, Sky Arts 1, Sky Arts 2, Sky Real Lives and Sky Real Lives 2 to return to Virgin Media from 13 November 2008 until 12 June 2011. In exchange will be provided continued carriage of Virgin Media Television's channels – Living, Livingit, Bravo, Bravo +1, Trouble, Challenge and Virgin1 for the same period.

The agreements include fixed annual carriage fees of £30m for the channels with both channel suppliers able to secure additional capped payments if their channels meet certain performance-related targets. Currently there is no indication as to whether the new deal includes the additional Video On Demand and High Definition content which had previously been offered by Sky. As part of the agreements, both Sky and Virgin Media agreed to terminate all High Court proceedings against each other relating to the carriage of their respective basic channels.

On 4 June 2010, British Sky Broadcasting and Virgin Media announced that they have reached agreement for the acquisition by Sky of Virgin Media Television. The companies have, in parallel, agreed to enter into a number of agreements providing for the carriage of certain Sky standard and high-definition (HD) channels. Sky acquired VMtv for a total consideration of up to £160 million in cash, with £105 million paid on completion and the remainder paid following the regulatory process. The acquisition expanded Sky's portfolio of basic pay TV channels and eliminated the carriage fees it previously paid for distributing VMtv channels on its TV services. New carriage agreements will secure wholesale distribution of Sky's basic channel line-up, including Sky1 and Sky Arts, and the newly acquired VMtv channels, on Virgin Media's cable TV service. For an incremental wholesale fee, Virgin Media will, for the first time, have the option of carrying any of Sky's basic HD channels, Sky Sports HD 1 and Sky Sports HD 2, and all Sky Movies HD channels. Virgin Media will make available through its on-demand TV service a range of content from Sky's basic and premium channels, including the newly acquired VMtv channels. Virgin Media will also have access to red button interactive sports coverage and the opportunity to deliver selected standard definition programming over the internet. Sky will assume responsibility for selling advertising for the newly acquired VMtv channels from January 2011. Completion of the agreements was conditional on obtaining merger control clearance in the Republic of Ireland.

Virgin1 was also a part of the deal but was rebranded as Channel One on 3 September 2010, as the Virgin name was not licensed to Sky. The new carriage deals are understood to be for up to nine years. Previously the carriage deals tended to be struck every three years.

On 29 June 2010, The Competition Authority in Ireland cleared the proposed transaction. The parties proceeded after the Minister for Enterprise, Trade and Innovation did not direct the Authority to carry out a full investigation within 10 days of the date of the Authority’s decision.

On 13 July 2010, British Sky Broadcasting and Virgin Media announced that Sky has completed the acquisition of Virgin Media Television (VMtv) following regulatory approval in the Republic of Ireland. VMtv was then re-named the Living TV Group. In completing the acquisition, Sky has paid Virgin Media an initial £105 million. Up to an additional £55 million will be paid on UK regulatory clearance.

On 20 July 2010, The Office of Fair Trading announced that they would review BSkyB's acquisition of the Virgin Media Television business to judge whether it posed any competition concerns in the UK. The OFT planned to investigate the deal to see whether it could constitute a qualifying merger under the Enterprise Act 2002. The watchdog invited interested parties from the industry to comment on the sale, including its potential impact on the pay-TV market. On 14 September 2010, The OFT decided not to refer BSkyB's takeover of Virgin Media's TV channels to the Competition Commission.

See also

Sky Broadband

Sky Magazine

SES Astra

Team Sky

Sky Betting and Gaming

References

External links

Category:Companies established in 1990 Category:Companies listed on the London Stock Exchange Category:Direct broadcast satellite services Category:Media companies of the United Kingdom Category:News Corporation subsidiaries Category:News International phone hacking scandal Category:Satellite television Category:Sports television in the United Kingdom Category:Companies based in London Category:British television networks Category:British brands Category:1990 establishments in the United Kingdom

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