Rupert's Risky Venture in British Commercial TV
BRITAIN has joined the revolution in commercial televison with four new channels - an increase of 100 percent. The trouble is, a week after the new channels were launched, very few people can see them. To sample the fare of Sky Television's glitzy programming, viewers must spend at least $440 for equipment for receiving the signal broadcast by satellite.
For the thousands of viewers waiting to tune in, there are few satellite dishes available in British shops. Design changes delayed production of dishes last year. But salesmen are talking about a market boom as the equipment becomes available; they predict monthly sales of at least 50,000 dishes for the rest of the year.
For now, only a few thousand homes in a country of 57 million people have these small-sized dishes. One of Sky Television's new channels is available on a cable network, which has about 600,000 subscribers.
Many industry analysts say that the owner of Sky Television, Australia's media magnate Rupert Murdoch, is taking a tremendous risk. Mr. Murdoch will spend an estimated $297 million in the first year of Sky TV, plus at least $18 million in publicity.
Murdoch is expected to lose most of his first year's costs but he says he is prepared to pour millions into Sky TV until his venture turns profitable. The investment is long-term, he says, and he is confident it will capture a profitable share of the British TV market by the early 1990s. He has promised advertisers Sky TV will reach at least a million homes by the end of this year.
Michael Grade, head of one of Britain's two commercial television stations, says Murdoch's business venture depends on a rapidly increasing audience to persuade advertisers to pay full rates. In turn, those rates will finance good programs. But Mr. Grade points out that if Murdoch does not build his audience quickly, he faces a Catch-22 situation: advertisers won't pay, funds for programs will be cut back, and viewers will be even less inclined to watch poor-quality fare.
British viewers already average four hours of television daily and experts say they are unlikely to watch much more. So they will have to be weaned away from the four tightly regulated channels - two operated by the BBC, which are funded from annual license fees of 62.50 ($112) per set, and two independent television (ITV) channels that carry commercial advertising.
Murdoch insists that Sky TV has brought a new era of broadcast freedom to Britain. ``You are no longer a child dandled on the knee of Auntie BBC or Nanny ITV and force-fed whatever pap they decide to drip down your throat,'' trumpeted an editorial in Today, a Murdoch paper. The new offerings include an entertainment Sky Channel featuring talk shows, sitcoms, soap operas, action series, and movies. There is also Sky News, a 24-hour news and current affairs channel, a Eurosport channel, and a movie channel. Two more pay-TV channels are expected later this year.