British Satellite Broadcasting

Entrepreneur Research Paper

Adriel McBride

DeVry University

December 17, 2012

TABLE OF CONTENTS

Introduction 3

Abstract 3

History behind BSB 4

Reasons for Failure 5

Analysis 7

Works Cited 10

British Satellite Broadcasting: The beginning of the end

Introduction

Many companies fail within the first two years of opening, according to small business administration which is seven out of ten, and 51 percent last at least five years. Starting a business is not an easy task, there are tons of things that have to done in order for it to be around for more than a couple of months or years. Unfortunately, that's the case with the company I chose, British Satellite Broadcasting.

Abstract

British Satellite Broadcasting (BSB) set out to establish a television company that provided direct airing to television services from a satellite to the United Kingdom. Which it did from 1977-1990 and had its first broadcast on March 25, 1990, most of the time was used towards creating a policy to have British be able to broadcast via satellite (Holden, 1998). The company had to merge with Sky Television in November of 1990 to form the British Sky Broadcasting (BSkyB's).

History behind BSB

In 1977 the development of British satellite broadcasting policy started, a meeting was held at the World Administration Radio Conference for a hearing for the division of broadcasting frequencies. During the meeting the administration assigned each country five high-powered channels for direct broadcast by satellite for domestic use. In 1982 BSB was awarded with two channels through the British Broadcasting Corporation (BBC) and in 1983 it started to negotiate with the Independent Broadcasting Authority (IBA) to join a joint-venture with other countries and start a joint satellite service but failed in 1985 (Holden, 1998).

It was said that the government insisted that the BBC should pay for the cost of constructing and launching a dedicated satellite. "The hearing concluding in 1992, which followed the Conservative Party's fourth consecutive election victory and BSkyB's successful, momentous bid for the rights to screen live English Premier League football matches" (Holden, 1998). The BSB had one main competitor which was Sky broadcasting, it had an advantage over BSB and proved that its system gave sufficient picture quality and many viewers didn't want to wait on a promise that was vowed by BSB for excellent programming. "Many customers compared the competition between the rival satellite companies to the format war between VHS and Betamax home video recorders and chose to wait and see which company would win outright as opposed to buying potentially outdated equipment" (Holden, 1998).

BSB mission was to create a satellite dish to broadcast high quality television programming for the British and hopefully expand to other countries. The reason BSB failed can be related to a lot of things but mostly money. Before BSB and Sky merged, Sky debuted first which hurt BSB, Sky provide a cheaper dish, which made it even more difficult for BSB. In January 1989 BSB experienced higher than expected cost that were required to achieve their planned air date. That caused them to push back their fall launch date.

This resulted in delays for developing a new semiconductor chip required for its satellite dish receivers, which raised their cost to £131 million (Holden, 1998). Many say that if BSB would have launched first they could possibly still be around. Sky and BSB were in financial trouble and after BSB collapsed in November 1990, they were forced to merge. That is how the BSkyB came about, no more BSB it was over and a new company had begun which was marketed as Sky TV.

Reasons for Failure

British Satellite Broadcast failed for a number of reasons one was the lack of financial stability and commitment. BSB was spending millions of dollars on equipment for receivers so they can be available for purchase. But they were slacking in the production department because they needed more money to make sure they had quality programming but missed their deadline. By the time they finally launched people had already turned to the competition because they were tired of waiting. When a promise is made to consumers it's best for the company to do everything in their power to oblige them or otherwise they will lose their support and money. That's exactly what happened with BSB they were focused on quality which was great but couldn't provide it in a timely matter.

Their competition offered a cheaper product and adequate quality which was better than nothing. The merge only helped Sky stay alive and killed BSB because they took all of BSB quality equipment and satellites and created something great. But if BSB would have kept their commitment/ launch date it could have been a different outcome today. So it kind of boils down to customer satisfaction, which is always a big part of a business success. When BSB couldn't make good on their promise it reflected badly on the company and made their consumers wonder if they were really up for the challenge. For example take a gamer that is anxiously waiting for a new Xbox game console to come out and is schedule for release in May but is