War of Attrition over the Satellite Television M Arket in the United Kingdom
WAR OF ATTRITION OVER THE SATELLITE
TELEVISION
M
ARKET IN THE
UNITED KINGDOM
1
Satellite Television Market
Prior to December 1996, the television market in the United Kingdom was comprise d o f four broadcasting channels
:
British Broadcasting Corporation 1 (BBC1), British Broadcasting
Corporation 2 (BBC2), Independent Television (ITV), and Channel 4.
BB1 and
BBC2
, whose viewing audiences in 1985 were
36% an d 11% respectively , are public compan ies, broadcasting high
-
quality, public
-
service programming, and are financed solely through annual license fees paid by TV set owners. ITV
,
who captured
46% of the viewing audience in 19
8
5
,
consists of several regional broadcasting private companies, finan ced solely through advertising revenues. Finally Channel 4 was launched in 1982 and is owned by the
Independent Broadcasting Authority (IBA).
In order to expand the choice of television viewers, industry experts believed that pay TV
, such as cable and sat ellite television, would be the solution. Both technologies were seen as complements .
A
nd
,
the cable industry was still growing at a modest pace, but still lagg ed far behind the cable development in the US.
Satellite television transmit s signals from a s tation on the ground to a geostationary satellite (in orbit at 22,000 miles above the earth) to the viewers’ receiving antenna e .
Such
a system could be implemented with low to high
-
powered satellites: the higher the transmission power, the lower the size o f the antenna required at the subscriber premises.
In 1981
,
Satellite Television PLC
(SATV) had launched such a satellite television service, using spare capacity on a low
-
powered satellite . D ue to its low transmission power, the signal had to be broadcast to cable systems rather than subscribers’ satellite dishes, which ultimately led to its commercial failure. News
Corporation,
TELEVISION
M
ARKET IN THE
UNITED KINGDOM
1
Satellite Television Market
Prior to December 1996, the television market in the United Kingdom was comprise d o f four broadcasting channels
:
British Broadcasting Corporation 1 (BBC1), British Broadcasting
Corporation 2 (BBC2), Independent Television (ITV), and Channel 4.
BB1 and
BBC2
, whose viewing audiences in 1985 were
36% an d 11% respectively , are public compan ies, broadcasting high
-
quality, public
-
service programming, and are financed solely through annual license fees paid by TV set owners. ITV
,
who captured
46% of the viewing audience in 19
8
5
,
consists of several regional broadcasting private companies, finan ced solely through advertising revenues. Finally Channel 4 was launched in 1982 and is owned by the
Independent Broadcasting Authority (IBA).
In order to expand the choice of television viewers, industry experts believed that pay TV
, such as cable and sat ellite television, would be the solution. Both technologies were seen as complements .
A
nd
,
the cable industry was still growing at a modest pace, but still lagg ed far behind the cable development in the US.
Satellite television transmit s signals from a s tation on the ground to a geostationary satellite (in orbit at 22,000 miles above the earth) to the viewers’ receiving antenna e .
Such
a system could be implemented with low to high
-
powered satellites: the higher the transmission power, the lower the size o f the antenna required at the subscriber premises.
In 1981
,
Satellite Television PLC
(SATV) had launched such a satellite television service, using spare capacity on a low
-
powered satellite . D ue to its low transmission power, the signal had to be broadcast to cable systems rather than subscribers’ satellite dishes, which ultimately led to its commercial failure. News
Corporation,