“It’s a wing and a prayer,” Rupert Murdoch reportedly said on February 5 1989, when Sky Television went live in the UK.
In the quarter of a century since then, the company has become the country’s biggest television operator by revenues. Here are some of the pivotal moments along the way:
1. Merging with BSB (November 1990)
Sky was already outwitting its satellite rival British Satellite Broadcasting in the war for customers when the two lossmaking sides called a truce in 1990.
Michael Grade, then head of Channel 4, called the move “scandalous” for giving more power to Mr Murdoch, but regulators waved it through.
The deal created a single satellite television provider in the UK, which, despite losing more than £10m a week initially, would have the financial power to later win the broadcasting rights to the UK’s key sports competition, the new Premier League.
2. Smashing ITV Digital (April 2002)
When Rupert Murdoch insisted that Sky switch to digital, Sam Chisholm, the company’s chief executive, headed for the exit.
But the move would allow Sky to offer over one hundred channels, consolidating its position as a platform for sports and movies.
A competing platform – ONDigital, later ITV Digital – mocked Sky as a service for “sad people who live in lofts”. But Sky smashed its rival through better encryption technology and free boxes.
3. James Murdoch’s 10m target (August 2004)
Sky’s potential growth looked limited when James Murdoch, Sky’s then chief executive, told City analysts that the company would have 10m subscribers by 2010.
“The vast majority of investors were extremely sceptical,” says Claudio Aspesi, an analyst at Bernstein. The target pushed Sky to reach beyond its core business of pay-TV.
4. Challenging BT in broadband (July 2006)
“Sleepy incumbents who were happy to maintain the status quo,” is how Andrew Griffith, Sky’s chief financial officer, describes the UK’s broadband market a decade ago.
Sky started by offering some free internet packages and gained over 2m customers within three years.
But its achievement has now created a threat – with its major rival BT retaliating by outbidding Sky for key sports rights.
5. Phone-hacking scuppers News Corp (July 2011)
It takes a lot for the UK House of Commons to consider voting unanimously that a corporate takeover is not in the public interest.
Realising that the game was up, Rupert Murdoch withdrew the bid and his 21st Century Fox remains a minority shareholder in Sky. However, speculation about a rerun is rising.
And a few damp squibs:
Not all of Sky’s attempts to innovate have paid off:
1. A Gnome for the home: Launched in 2005, the Gnome allowed Sky customers to listen to audio throughout their home via their Sky receiver. The ill-fated device lasted less than two years.
2. A rival to iTunes: “An outstanding catalogue” and “unrivalled expertise”, promised Sky’s chief operating officer Mike Darcey in 2009, when he unveiled Sky Songs, a music download service.
The result? As Sky’s website puts it, “regrettably we were not able to reach a large enough customer base in order for the service to continue”.
3. Discounts for long-term customers: In 2007 James Murdoch, obsessive about customer research, promised Sky would reward its long-term subscribers ahead of newcomers. That idea turned traditional marketing on its head and never became reality.
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