British Satellite Broadcasting Vs. Sky Tv
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How might BSB have been able to identify News Corporation as its potential competitor even before Rupert Murdochs announcement on launch of Sky Television?
Already Murdoch made an entry in the US satellite TV industry. He was aggressive and due to his stake in Sky, it was only a matter of time before he entered Britain. He has the capability to overcome the entry barriers. But so do other. News corps overall strategy was to be global and to dominate. Already present in US and Europe.
Felt UK was a dominated market and shook it up in the newspaper industry. It was an established society and to change it would be through the news and media network. So wanted to enter and dominate UK.
Competitor who is competing on economic parameters is much safer, as then we can apply game theory and rationality to it. But Murdoch was losing money and yet staying in. Thus econometrics did have a say in this game.
What might have BSB done differently before Skys announcement of entry? What might have been done differently after the announcement?
BSB could try to stop the entry of Sky or minimize the impact on BSB. They have currently made the following moves. They cold have procured movie rights early and saved costs. BSB could lobby to prevent PAL technology of Sky, as BSB was sinking in close to 1B in DMAC technology. No country would want its citizens – shareholders to lose that money.
In technology choice, they didnt de-risk their strategy by preventing PAL. A user of tech, it makes immense sense to have options in multiple standards. Bcos betting on only 1, if that std fails, I stand to lose a lot. Pre-sales of receiving equipment could have done if one had the option of PAL technology. Could have given customer initially PAL technology and then replaced it later with DMAC. Instead of launching their own satellite, could have leased it. Extravagant, expensive office space.
Anticipate compttn, id who they are, take mitigating steps
What should BSB do in 1990? Why?
Both try to merge.
Form a cartel
Acquire Sky
Sky / BSB
Exit
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