Britain Prepares for American Cable Invasion

An unprecedented wave of American cable channels will wash across British satellite TV this fall in a radical shake-up of the nation’s space-based television business.

British viewers will soon be able to watch endless hours of Daffy Duck, Dick Van Dyke and other American icons. Or they can tap their feet to country music or discover the world of home shopping.

Behind the surge in American programming is British Sky Broadcasting, the multi-channel satellite service whose dominant partner is Rupert Murdoch’s News International. To galvanize interest in satellite TV, BSkyB has organized a basic package of 12 channels--its own and others--which will go for a monthly rate of $10.50.

All channels in the package will have their signals scrambled to prevent non-subscribers from watching. Premium movie and sports channels will continue to be available for an additional fee.

Although the arrangement is similar to the cable TV system in the U.S., it is an innovation in Britain, where cable is rare.

“Somebody needed to become the cable operator in the sky, and that’s what we’ve tried to do,” said David Chance, BSkyB marketing and distribution director.

Murdoch will travel to London to launch the new satellite lineup on Sept. 1.

Among those joining the BSkyB package are Nickleodeon; the Discovery Channel; Bravo; the Family Channel; QVC--The Shopping Channel, and Country Music Television. VH-1 and Nick at Night will join the lineup early next year.

Also coming this fall, but outside the BSkyB subscription arrangement, are Ted Turner’s cable networks, TNT and the Cartoon Channel. Like Turner’s CNN, they will be beamed across Europe.

For the American programmers, the BSkyB package offers the opportunity to get in early and establish brand awareness in a market that appears to have high-growth potential. And for BSkyB, the major force in British satellite television, the “more channels-more choice” package is seen as a way to galvanize sluggish dish sales while creating a new revenue stream.

Until now, dish owners in Britain have only had to pay for premium movie and sports channels. Everything else came free to them--once they paid roughly $450 for satellite dish and installation.

But while BSkyB’s scrambled premium channels have become profitable, there has been little money in transmitting unscrambled channels.

Satellite programming now reaches about 15% of all TV homes in Britain and accounts for just 6% of viewing. Advertising revenue is minimal. And at current growth rates, it will take years for satellite TV to reach a majority of British homes.

To overcome those gloomy projections, BSkyB went about organizing programmers who had been looking for a way into the British market.

Turner’s TNT and the Cartoon Network decided to operate outside the package, however.

Like Turner’s networks, a few satellite channels will continue to transmit unscrambled. But some of the most important--such as MTV Europe--are likely to begin scrambling their signal in the near future.

BSkyB will become a partner in the British operations of some of the new channels, such as Nickleodeon and QVC. And most of the channels will tailor their programming for a British audience.

But will the multi-channel package offer enough enticement to lure British viewers?

There is widespread belief that not all the new channels will make it and that some consolidation will be necessary.