In 1982 the UK government handed the BBC a licence to start a direct broadcast satellite service. But the licence obliged the BBC to buy British satellites and use a new European TV system called MAC, instead of PAL, the existing standard for terrestrial television.
After estimating the cost, and hearing what its own engineers were warning, the BBC opted out. In 1986 the poisoned chalice went to BSB, a consortium that initially included Amstrad and Virgin. BSB was told it could buy cheaper, foreign satellites but it still had to use MAC. The licence was for three TV channels.
BSB promised to launch in 1989, with full receiving systems at under £200; an ITN news report optimistically quoted £100 as the cost.
The station finally went on air in April 1990. Receivers cost £400 each, plus around £100 for aerial installation. Virgin had already dropped out; Amstrad was making much cheaper PAL receivers for the rival Sky service. Sky had launched in February 1989 from Luxembourg’s Astra satellites, with permission for 48 channels. BSB’s limit had been raised – but only to five.
Two techno-turkeys helped make BSB a commercial disaster; government compulsion to use MAC and BSB’s commercial decision to build its marketing campaign on the Squarial, a small flat aerial which had been promised by BSB to compete with Sky’s bigger round dish. In reality few people cared about picture quality or the size of the dish outside. They were more interested in the programmes on screen and the cost. Sky soon made its dishes smaller, anyway.
By late 1990 Sky had sold a million dishes, most at cut price, and was losing £2m a week. BSB had sold less than 100,000 and was losing four times as much. BSB’s two US-made satellites had cost $304m. In November, BSB collapsed into a merger with Sky and the rest is history. Sky went on to become a major force in broadcasting. In 2015 BSB’s grand HQ in Battersea, Marcopolo House, was demolished.