Magazine article Marketing

Sky's the Limit for Satellite TV

Magazine article Marketing

Sky's the Limit for Satellite TV

Article excerpt

Sky's the limit for satellite TV

Advertisers, media buyers and TV companies are hastily rethinking their plans in the wake of the shotgun marriage between BSB and Sky - and already some are predicting a gloomy future for rival national commercial operation Channel4.

Media buyers are agreed: by combining the two warring parties the new British Sky Broadcasting has transformed the UK advertising scene, turning an expensive failure into a dangerous threat to existing terrestrial operators. New British Sky Broadcasting chief Sam Chisholm will, for the first time, be able to offer advertisers the coherent media buying and planning opportunity that comes from having one system.

Knock-on effects are still unfolding. They include another body blow to squarial manufacturer Philips, a dazzling new opportunity for Japanese hardware manufacturers, and a big step back for the European "Eureka" project - a scheme designed to beat the Japanese to high-definition TV (see box, right).

The deal also means that international media operators like US-based CNN and Italian-based Berlusconi could soon be broadcasting to the UK from the Astra satellite's spare channels, opening the UK up to more competition.

But at the same time, the merger has fuelled the already bitter row over the regulation of UK media. The chances are that if one regulatory authority does not scupper the deal, another will have a go. Since Friday's announcement, the IBA has admitted it is investigating the feasibility of a damages claim for breach of contract. It is also poring over the Cable and Broadcasting Act and Data Protection Act for ways of stopping the deal. The IBA's successor, the Independent Television Commission, has also come out against the deal and the Office of Fair Trading has announced its intention to investigate the ownership arrangements.

On Monday, Labour Party broadcasting spokesman Robin Corbett described company threats to shut down the old BSB and head off-shore, should regulators intervene, as "a bluff". Attacking the merger as a "Skyjack", he told Marketing "We are totally opposed to a satellite monopoly, particularly when controlled by a non-EC national (Rupert Murdoch)." But Tory minister David Mellor has taken the line that market forces should prevail.

Already, the Government's own Sadler Inquiry into cross-ownership of media is looking closely at the Murdoch empire's powerful presence in newspapers and broadcasting.

Following last weekend's turmoii, when the old BSB shareholders Granada, Pearson, Chargeurs and Reed International closed their deal with Sky parent News International, all parties are maintaining stony silence.

But the verdict in the advertising and media industries is clear. As Young and Rubicam joint media director Simon Matthews puts it, "out of nothing satellite has become an almost exciting and bubbly medium. Like it or hate it, the advertising economy couldn't support both groups."

Ken Miles, head of the Incorporate Society of British Advertisers, welcomes the new clarity in the market - while expressing reservations about a company consolidating a UK monopoly.

Main losers, apart from squarial manufacturers and media owners who were benefiting from the desperate marketing war between the old BSB and Sky, will be the television companies. …

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