Report: Bsb vs Sky Television

1. BSB should have been able to identify potential competitors, particularly News Corporation. News Corporation was successful in US (in the US TV satellite industry), had experience transmitting television programs to Western Europe with a low-powered satellite and they already had presence in the UK with newspapers, which could allowed Sky to realize economies of scope. These economies of scope are even more significant if we take into account that News Corporation owns 20th Century Fox Studios. After purchasing 69% interests in SATV and renaming it to Sky Channel, this was a clear signal of a potential competitor to BSB. Adding to this, other signal was Murdoch’s personality, characterized by being aggressive and used to risk and make big bets. After all, he had bid against BSB to the British DBS franchise and lost, and given his personality, it’s normal that he would not go away after the first round. News Corporation is a global company and UK is one of the wealthier nations in the world, with high potential advertising revenue, which would make Murdoch want to be the leading player.

BSB made another mistake when they focused more on technology and not on customers and costumer needs. Data doesn’t give significant information that costumers wanted higher quality TV (comparing to existent BBC or ITV for instance) as BSB assumed, and therefore thought that having the 15-year franchise of the high-powered DBS channels, the other medium and low-powered were not a concern. Nevertheless, competitors had the capability to overcome the entry barriers. This could be made for example with Astra that would launch medium powered satellite in 1988, and so, before BSB planned to start broadcasting. With medium-powered satellites, Sky could get around the license requirement and they could have a partnership with Amstrad (that left BSB) to supply the satellite dishes. The technologies to launch the services were available and the Sky service could still be launched before