Bsb Versus Sky Tv Essay

2063 Words Sep 12th, 2008 9 Pages
Executive Summary

British television viewing levels had stagnated in the 1980s due to already high levels of television viewership (3.5 hours per day) and the rapid penetration of the VCR. This caused broadcast companies like BBC and ITV to look for new ways to spurn growth. The British government tried to allocate three of the five high powered digital satellite broadcast (DBS) channels first to the BBC and then to a joint venture between BBC and ITV. Both attempts failed due to high startup costs in building and launching dedicated satellites. The bidding for these channels was then moved to the private sector in April 1986. Additionally, the use of the untried D-MAC transmission standard that was viewed as a move towards HDTV was
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A year and half later BSB had only grown to several dozen employees who occupied an office in the prestigious Kensington Park area. BSB did however, understand that making the chip technology work was crucial and obtained an exclusive contract with ITT.

Assuming that BSB was aware of Sky’s intentions it should accelerated the ramp up of its operations. Recruiting should have started in full earnest and compensation packages should have been built based performance (e.g. successful deployment of first satellite, etc.) BSB should have contemplated hiring key personnel from News Corporation and other broadcasting companies in the US and Europe who had more direct experience with satellite broadcasting business so as to get a leg-up in the learning process. Given that it had a “money back” guarantee from Hughes who was delivering the satellites; it should have pursued similar contracts with ITT. Maintaining a low overhead expense would also allow it to stay in the fray longer. Relocating from the swanky Kensington Park area to a cheaper alternate would help in this regard. BSB, although well supported by its founding companies could have also looked at making its economic model more attractive by reducing future capital expenditures. Leasing the high powered satellites from Hughes would have allowed it reduce its cash outlay and stay more competitive with Sky.

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