British venture into satellite TV will include private companies
Britain's leading television organizations are to work together to operate a direct broadcast satellite system offering viewers three channels. The plan announced by Home Secretary Leon Brittan calls on the British Broadasting Corporation (BBC), the Independent Broadcasting Authority (IBA), and a consortium of commercial companies to cooperate in funding the system.
Mr. Brittan's proposal follows months of uncertainty during which it became clear that neither the noncom-mercial BBC nor the commercial-sponsored group of TV companies supervised by the IBA could afford to operate direct broadcast satellites individually.
It was thought that well-advanced plans for bringing cable TV into British homes would squeeze satellite projects out. Now the government has created a context in which the BBC and IBA will work together, aided by business groups wanting a stake in TV from space.
But the government is setting strict terms under which the space TV consortium must operate. The BBC will be forbidden to finance its stake in the project out of viewers' license fees - its standard source of funding for its operations. Instead it will use loan finance.
The commercial channels will be required to move toward early profitability.
The third segment, made up of big companies with an interest in TV broadcasting, is intended to give the consortium the benefit of their commercial acumen.
In the end, viewers will be able to watch three space-based channels. The target date is 1990, and one of the channels is likely to be restricted to the showing of films.
The project is expected to make money when it has some 2 million subscribers - a target thought to be readily attainable in a country of more than 50 million people.
The government has also proposed the establishment of the first national commercial radio channel by the end of the decade. The new station will provide a service of news, pop, and chat and will be financed by commercials.
Until now, the only nationwide radio service in Britain has been provided by the BBC, which operates four channels. Commercial radio has been restricted to local stations which combine only for news items provided by a separate service. The proposed commercial channel will offer the BBC across-the-board competition.