Don't Underestimate Him

I can still remember the night many years ago when a viewer of BBC's South Today contacted the programme wanting to demonstrate that it was possible to recieve BSkyB's programmes using a dustbin lid as a make-do satellite dish. Bruce Parker, the co-host with Sally Taylor back then, made the pithy comment that, "if you can receive programmes on a dustbin lid then they must be rubbish." Oh, how we laughed, BSkyB didn't seem to have much to offer in those far off days apart from The Simpsons, but with the creation of the FA Premier League things changed forever.

British Sky Broadcasting (Sky to Joe Public) is rapidly approaching it's 10 millionth customer, hitting its target in its 20th year of existence, on forecast as it happens. As Sky increases it's number of subscribers and therefore its share of the television watching audience it has moved into home Broadband among other areas of our life.

Now News Corporation owns 38% of Sky, it also wholly owns all of Sky Italia, most of Sky New Zealand, and the television networks of Croatia and Montenegro. It's the 38% stake in Sky which is most important for the future of both News Corp. and the broadcaster.

Back in June News Corp. decided to stop making The Times and Sunday Times online pages free to air (to borrow from television) and changed to a subscription based service and as a result has lost around 90% of its online audience.

Rupert Murdoch believes that using what is known as a 'paywall' will produce significant revenues in the future and that other free to use newspapers will follow the lead of the Times.

What is interesting however is that 38% stake in Sky. News Corp want to increase their share, that's not exactly a secret and if they succeed then there's little doubt that just as paper subscribers to their two titles were offered free online subscriptions then anybody taking out a Sky subscription (either to TV or Broadband) will get a free subscription as well. The lost advertising revenues will return, there will be mutual benefits to both parties from cross subsidisation and promotion and what looked like, back in June this year, as a completely barking idea could turn out to be the work of genius.

Sources used: The Guardian (20th July 2010), BSKyB facts and figures, The Independent (3rd November 2010)