BSkyB sets up interactive venture

LONDON — Satcaster British Sky Broadcasting is expected to announce the formation of the long-awaited company British Interactive Broadcasting this week, a joint venture set up for the launch of digital satellite TV services in the U.K.

BIB represents a $1 billion investment in a four-way partnership involving BSkyB, British Telecom, Japanese electronics giant Matsushita and the U.K.’s Midland Bank.

BSkyB and BT will hold 30% shares in the new company, with Matsushita and Midland at 20% each.

The company’s core purpose is to subsidize the cost of set-top boxes to the consumer, lowering the unit retail price from as high as $800 to about $320.

The launch of BSkyB’s 200 planned digital TV services, however, will be delayed from its original date of sometime in the fall to probably spring 1998, after the U.K. cable industry’s planned digital launch in the fourth quarter of this year.

BT will gain capacity and interactive services, Midland will offer home banking and Matsushita will manufacture decoders through the deal. The technology will be compatible with that of the cable industry, as well as digital terrestrial broadcasters and rival telephone companies.

The decision to make the boxes universal is an acknowledgment that the British public is unlikely to purchase more than one form of digital decoder.In Japan, Matsushita rival Sony is expected to partner with Murdoch’s direct satellite broadcasting venture, JSkyB. Sony will be an equal partner in the venture along with News Corp. and Japanese software house Softbank, sources close to the companies said.

Matsushita already has a 10% stake in DirecTV Japan. The Hughes Electronics Corp. is scheduled to go into service toward the end of 1997 with a 100-channel platform. JSkyB will begin full-scale operation in spring 1998.

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