Rupert Murdoch’s British Sky Broadcasting has formally announced details of its digital plans, confirming the setup of British Interactive Broadcasting (Daily Variety, May 7) as well as the placement of an estimated $490 million order for 1 million set-top boxes.
Meanwhile, in Tokyo, Japanese electronics giant Matsushita Electric Industrial Co. said Wednesday it has reached an agreement with BSkyB Group and two other British firms to facilitate the satcaster’s launch of 200 digital TV channels in the U.K.
“(BIB) will provide a digital platform to deliver digital interactive services to TV viewers in the U.K.,” Matsushita said in a statement.
BSkyB and British Telecom will both own 32.5% shares in BIB, with the Midland Bank taking 20% and Matsushita the remaining 15%. The partners have agreed on an investment of $432 million to cut the cost of digital boxes — which will sell for about $325 — and to build BSkyB’s digital infrastructure.
BSkyB has also lessened the financial blow of the launch by agreeing to open up a new orbital position with Astra, the Luxembourg-based satellite system, in return for discounts on leasing satellite space for its digital launch.
Matsushita has been making noise for some time about entering the European direct digital television satellite broadcast market. Its rival, Sony Corp., is expected to join hands with Murdoch’s Japanese satellite broadcasting venture, JSkyB.
As anticipated, BSkyB’s digital launch will be delayed until early to mid-1998. The launch was originally skedded for the fourth quarter of 1997.
Should the U.K. cable industry succeed in launching digitally in the fall, as its biggest operators plan, the industry could significantly up its present minor clout in its dealings with BSkyB, cable’s key TV programming provider in Britain.
Although Matsushita will be the main supplier of BSkyB’s digital technology, other companies that have received contracts are believed to be British computer company Amstrad, British sat technology manufacturer Pace Microelectronics and Korean conglom Hyundai.
The decoder boxes will be capable of handling interactive services — such as pay-per-view — and can be upgraded for use with cable or digital terrestrial signals. BSkyB is part of the consortium British Digital Broadcasting, which is bidding for a digital terrestrial license in the U.K. and is favored to win.