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British Broadcasting Group plc Everyone’s watching Grant Way, , Middlesex TW7 5QD Telephone +44 (0)870 240 3000 Facsimile +44 (0)870 240 3060 www.sky.com

Registered in England No. 2247735 A digital vision for everyone Contents Introduction

01 Introduction Remember when your television was part of the furniture? 02 Overview 06 Our achievements When it sat in the corner of your room – and your 08 Everyone’s watching 12 Customer culture life – presenting a limited choice of programmes from a 14 Programming overview 26 Channels on digital satellite 28 At a glance broadcasting establishment that had turned complacency 30 Watching everyone 32 The challenges ahead into a fine art? “Take it or leave it,” they told the British public. When Sky offered an alternative, millions of people took it to their hearts – and left traditional broadcasters stunned. In twelve exhilarating years, we have transformed the television from an inanimate piece of furniture into an irresistibly positive force in people’s lives.

We are close to the very of 21st century living. Once labelled a downmarket upstart, Sky’s achievements have given it a firm footing in the broadcasting landscape. But its embrace will never stifle its pioneering spirit. Invention and creativity, entertainment and challenge remain our guiding principles. At the heart of our culture lies an uncompromising commitment to understanding what people want – then delivering it. We are passionate about the potential of digital television. After all, it is the tool we use to make every day extraordinary for every one of our customers.

Twelve years ago, Sky changed the face of British broadcasting overnight. Today, everyone’s watching as we build our digital vision.

01 A digital vision for everyone Overview

Sky has revolutionised the way British people relate to television. That is not a question for debate. It is a matter of fact accepted by the broadcasting establishment, our competitors, industry commentators and analysts alike. The only people who do not accept the fact are Sky customers. They celebrate it.

Indeed, the public’s endorsement of Sky’s vision has been the critical factor in our transformation from maverick upstart to broadcasting thoroughbred. Had we not given the public what it wanted in such emphatic style, the establishment would still be arguing that the British public was simply not ready for choice, service and quality. But Sky’s progress has persuaded the cynics to accept the weakness of its argument – and respect our strengths.

Touching people’s lives Our principal strength is our talent for touching so many lives in so many extraordinary ways. Over the past twelve years, our track record of innovation and creativity has transformed people’s relationship with television from a one-way, love-hate affair into an exciting, enriching, two- way pleasure. Look at the way we revitalised the nation’s sporting obsession. Before Sky started broadcasting English matches in 1992, terrestrial channels barely managed 20 live matches annually. Sky Active and Extra: pioneering From 2001, Sky Sports will show 66 live English the age of . Premiership games per season. We have also worked “...it's this wonderful virtuous circle whereby if you’ve our make-over on numerous other sports; notably got the right content then you’re going to attract , rugby and . people to your base; and if you attract people to your base, if your base gets bigger, then you’re able to attract more content. It just keeps going round and round and round.” Tony Ball, Chief Executive

02 03 A digital vision for everyone

We are determined to build a digital vision for everyone. So far, we have invested over £2 billion in realising that vision.

As we win more and more people over, our people send e-mails, shop on screen, play screen games, select continue to win more and more honours. And our success their own camera angles, bookmark their favourite channels, is not confined to sport. Sky consistently wins praise for lay bets and manage their finances. One day, everyone will the quality and originality of its drama, documentaries and take this sort of versatility and choice for granted. For entertainment programmes. and are televisions are no longer inanimate boxes. Instead, they are leaders in their field. So is , whose reporters already a gateway to a diversity of digital services.

have come to symbolise Sky’s immediacy, authority, The professionalism of our customer service representatives is fundamental to realising professionalism and maturity. our digital vision for everyone. Customer service We may lead the digital race, but our competitors are This was not always the case. Many of us riding the already in pursuit. And they have the talent and

By of 2000, we had convinced over crest of today’s wave vividly remember the early 1990s resources to make a good scrap of it. What gives million DTH subscribers to share our vision. as we struggled to find our feet in a hostile media and a winning edge is its devotion to serving customers’ needs. Together, they enjoy an unprecedented choice of channels – over 300 in total, 80 of our own. broadcasting environment. Weekly losses hit £11 million, This quality has already given Sky a significant advantage the knives were out, the prognosis was grim. But we over its competitors by helping to keep churn levels at stuck defiantly to our founding vision: to be the first, to below 10% – the lowest in the industry. There is still room be the best, to see beyond the horizon. for improvement. That is why Sky continues to channel so much investment into reinforcing and enhancing their A digital vision for everyone customer service infrastructure. One lesson learnt is that Sky is determined to build a digital vision for everyone. winning the hearts and minds of customers is fundamental. So far, it has invested over £2 billion in realising that vision. Serious money, and it has been worth every penny. Future perfect Embracing digital technology has re-ignited our pioneering Sky will never compromise on building a digital vision for spirit, providing a platform from which we can touch even everyone. Or be satisfied with what it has achieved so far. more lives in even more extraordinary ways. We are impatient to keep innovating, creating, entertaining and challenging. And this time everyone is watching. Millions of Sky digital subscribers now enjoy a world of Sports fans can even place bets from their armchairs, thanks to the interactive innovation invention, creativity, entertainment and challenge. Over of Bet TV. 5 million people now share our digital vision. Together, they enjoy an unprecedented choice of channels – over 300 in total, 80 of our own. Digital satellite viewers can also enjoy a range of other digital services that allow them to

04 05 A digital vision for everyone Our achievements

Since our launch in 1989, we have achieved an unbroken succession of breakthroughs as we continue to revolutionise the face of British broadcasting.

1989 1990 1991 Sky television launches its UK Sky reaches 1 million UK homes. 1 million UK BSkyB streamlines its direct to home service with a four- British Satellite Broadcasting (BSB) channels into a five-channel channel network. The customer launches; then Sky and BSB merge homes reached network offering from BSB and contact centre opens in Livingston, to form British Sky Broadcasting Sky: Sky Movies, the Movie Scotland. (BSkyB). Channel, Sky Sports, Sky One and Sky News.

1992 1993 1994 1995 BSkyB secures exclusive rights to Sky multi-channels launches with £13 million Sky announces a £13 million BSkyB enters the FTSE 100 index. screen FA Premier League football a package of 14 channels at basic investment in British films, The number of subscribers to matches live. subscription level. investment in including a major output Sky channels across all platforms deal with British Screen. exceeds 5 million. A second British films customer service centre opens in Dunfermline, Scotland.

1996 1997 1998 October 1999 May BSkyB secures a contract for 6 million BSkyB reaches a long-term Sky digital – the UK’s first digital Digital launch with Sky digital is confirmed as the exclusive live coverage of FA agreement to provide programming television service – launches with world’s fastest digital TV launch Premier League football until the households on the new digital terrestrial service, 140 channels of news, sport, 140 channels ever, with 551,000 sales by end of the 2000/2001 season. to be operated by British Digital documentaries, movies and 3 May 1999. Over 6 million households now receive Sky Broadcasting. entertainment. receive Sky channels across channels all platforms. 1999 June 1999 August 1999 October BSkyB launches its dish and Free dish & Sky Sports Extra launches, offering Open launches an interactive box offer with a one-off standard the world’s first live interactive television service offering a range installation fee of £40 for Sky digital offer football coverage. of shopping and email services; subscribers. This offer reflects Sky’s information, games and determination to remove any barrier entertainment from leading names, preventing people from sharing its such as WH Smith and Dixons. digital vision.

2000 February 2000 March 2000 May Sky Sports extends the interactive The Sky Sports Extra wins the Royal Sports innovation viewing experience to include awards BSkyB its highest honour, Television Society’s Sports England’s home games in the the Gold Award for outstanding Innovation of the Year award. of the Year award Six Nations rugby championship. services to television.

2000 June 2000 July 2000 August Sky News Active launches as the BSkyB announces plans to Sky Pictures Sky Pictures scores a US box world’s first interactive television switch off its analogue service office hit with the acclaimed news service. in the summer of 2001 – ahead scores US box comedy Saving Grace, starring of schedule. office hit Oscar-nominated Brenda Blethyn.

2000 August 2000 December There’s still more to Original Sky One puts new comedy and BSkyB reaches its target of 5 drama at the centre of its autumn million subscribers several weeks come. By the end of productions schedule. Original productions ahead of schedule. 92% of 2003 we aim to have include a new series from Harry subscribers are now digital. for Sky One Enfield, and drama including The company sets a target of 7 million Sky digital Dervla Kirwan in . 7 million digital subscribers by homes. the end of 2003.

06 07 A digital vision for everyone Everyone’s watching

No wonder we attract so much attention – not only Name: Tom Colebrook, Age: 24 Favourites: Sky One, Sky News Active & Sky Sports from viewers; but from competitors, investors and analysts too. Sometimes it feels as if everyone is watching our every move, anticipating our next innovation. Sky’s statistics certainly tell an amazing story. Up to 70,000 digital installations every week... Over 5 million in total... Over 300 channels – and rising. Revenues up by 27%... Churn down to below 10%... But these statistics don’t tell the whole story. The very human story of people whose lives we have touched in so many extraordinary ways...

Customer growth DTH, Cable and DTT customers (millions)

01 9.891*

00 8.988

99 7.442

98 6.899

*Nine months ended 31 March 2001

08 09 A digital vision for everyone

‘BSkyB has moved furthest and fastest into digital.’ The Economist, 07/10/00

When Sky recognised that the future of and manage their finances. Thanks to digital, Behind these statistics lie some intriguing One’s ability to attract a consistently strong broadcasting was digital, we immediately the days of sitting passively in front of the facts about the sort of people who prefer following among relatively well-off 16-34 invited people to share our digital vision. With box watching programmes is already history. Sky – facts that buck stereotypes while year-olds. In fact, all Sky channels draw their characteristic courage, we embraced digital Sky is driving a huge in the way our adding significant value to Sky’s revenues. audiences from among the most prosperous heart and soul and determined to make a society relates to television – and everyone is Advertisers are particularly interested in Sky households in the country. clean break with analogue. That was not a watching. Not just our viewers. The industry cheap decision: to date we have invested is watching, critics are watching, competitors over £2 billion in spearheading the digital are watching, analysts are watching, social revolution. Nor was it an easy decision. After commentators are watching as Sky builds a all, our analogue heritage is the foundation digital vision for everyone. of our success, the platform upon which we Sky One viewing profiles Sky Premier viewing profiles transformed an entire broadcasting culture. Quality and excellence By age By age But that was then, the digital future is now – Well before the dawn of the digital revolution, 4-15 24% 4-15 21% and arguments that Britain is not ready for Sky had changed British broadcasting Sky’s digital vision are clearly unsustainable. beyond recognition. Today, there is a whole 16-34 40% 16-34 36% generation of young people that has grown 35-54 29% 35-54 34% The fact is that public demand for Sky up with Sky. A generation that finds the Our installation teams play a vital, customer- 54+ 7% 54+ 9% facing role in satisfying demand for Sky digital. digital has been explosive. In its first year, idea of living in a five-channel, analogue the service attracted 1.3 million subscribers. household as incomprehensible as watching Source: TNS/BARB Source: TNS/BARB Of course, offering people a free set-top television in black and white. box and mini-dish was a decisive factor in accelerating demand. But we are determined Britain has the largest digital TV market in Sky Sports viewing profiles Sky Moviemax viewing profiles to remove any obstacle facing people who the world: more than 30% of homes use a By age By age want to share our digital vision. And millions digital TV service of some sort; over 50% 4-15 11% 4-15 12% of people do. We set ourselves a target of of homes with children are multi-channel. 5 million DTH subscribers by the end of Of course, Sky has the biggest share of this 16-34 29% 16-34 32% 2000, and hit it. Currently, we have over fertile market. Young and old, our customers 35-54 36% 35-54 38% 5 million digital subscribers and we’re aiming are among the most affluent and technically 54+ 24% 54+ 18% to have signed 7 million by 2003. What’s literate in the country. So much for the Source: TNS/BARB Source: TNS/BARB the big attraction? Quite simply, digital stereotype; so much for complacency. technology has given us the power and For pleasing our customers is the most freedom to give more people more of what powerful incentive we have to keep they want – in ways that make their lives innovating, keep creating, keep entertaining. extraordinary. Sky News viewing profiles viewing profiles Our customers are as passionate about By age By age On a basic level, going digital has enabled digital television as we are. They challenge 4-15 6% 4-15 6% us to expand our choice of channels and us to delight them with even better content programmes; then match greater quantity and even more ingenious interactive features. 16-34 18% 16-34 22% with digital quality. More significantly, They regard exemplary customer service 35-54 43% 35-54 44% perhaps, going digital has catalysed the as a right not a privilege. And they are 54+ 33% 54+ 28% transformation of the television into a discerning enough to reject substitutes Source: TNS/BARB Source: TNS/BARB seamless, one-stop, interactive platform with the flick of a button. One thing we carrying a diversity of digital services. So, as have learnt over the years: you can’t fool well as showing conventional programmes, the children of Sky’s digital revolution. our service empowers millions of people to send e-mails, shop on screen, play screen games, select their own camera angles, bookmark their favourite channels, lay bets

10 11 A digital vision for everyone

‘BSkyB has set a scorching pace both in converting its Customer culture old analogue subscribers and in signing up new ones.’ Variety, 28/08/00

Churn rates Invention, creativity, entertainment and As more people buy into our digital vision, Digital and analogue subscribers challenge. You have seen how our we invest more to serve them. Backed by defining qualities distinguish us from a £50 million investment, we are upgrading 2000-2001 9.9%* other broadcasters. And these qualities our existing centres in Livingston and 1999-2000 10.5% are underpinned by one fundamental: Dunfermline too. 1998-1999 13.4% customer service. *Nine months ended 31 March 2001 Our customer care teams work closely We don’t just talk a customer-centric with our installation specialists, who also philosophy. We walk the talk – then go the play a frontline role in managing our extra mile. Our devotion to our customers customer relationships. We have invested infuses our entire culture. It even shapes heavily to ensure they are equipped to the way we use the language. For example, deal with the explosive demand for Sky’s we don’t have call centres, we have digital equipment. customer relationship management centres. Mere semantics? Absolutely not. When customers call Sky, they don’t simply get a voice at the end of the line. Instead, they are Offering the best connected to a customer care professional Like Bob (left), our installation specialists – with the training, initiative and judgement to working closely with our customer service teams – put a friendly, approachable face manage customer relationships effectively to our customer-centric culture. and profitably.

Investment in communication centres Customer loyalty scheme High-profile advertising campaigns Integrated advertising campaigns, including the free We repay our customers’ loyalty with even more Bob the Installer is becoming a household dish and set-top box promotion, are designed to reasons to choose Sky: more choice, more name as more and more people see him roll-out increase Sky digital sales and boost pay to basic quality, more value – and even a Customer Sky’s digital vision nationwide. ratios and maximise profitability per customer. loyalty scheme.

12 13 A digital vision for everyone Programming overview

Sky Sports: the thoroughbred performer Sky News: combining authority, Sky Sports – the channel that changed the popularity, accessibility face of British football – continues to Sky News is arguably the most compelling revitalise sports as diverse as golf and symbol of Sky’s authority, accessibility and cricket, boxing and rugby. popularity. Having written the book on 24-hour news coverage in the UK and Currently, Sky Sports incorporates five Europe, the channel continues to win channels: Sky Sports 1, 2, 3; Sky Sports acclaim from audiences and critics alike. Extra; skysports.comTV. Together, they From Paddington to Kosovo; from East broadcast over 30,000 hours of sport every Timor to Mozambique... Sky News Name: Claus Jun, Age: 52 year. Not only is Sky Sports synonymous reporters – supported by outstanding with champions, it wins honours in its own technical expertise – consistently turn in Favourites: Sky News & Sky News Active right, notably a BAFTA for live coverage of world-class performances with exemplary international rugby. Indeed, Sky’s sports professionalism, insight and timing. coverage is defined by passion, innovation and flair. Its ground-breaking interactive In recent years, Sky News has won features place viewers at the very heart of recognition from – among others – the Royal the action. Within the first year of interactive Television Society, BAFTA, the Emmies and coverage, seven different sports were given the New York Festival. Uniquely, Sky News the treatment, offering viewers a wealth of combines heavyweight authority with skysports.comTV information, choice of camera angles, even popular accessibility, a quality enhanced US Open – Sky Sports 2 a choice of live match. by Sky News Active.

Using , viewers can react to The world’s first interactive television news developments and even place bets. service, Sky News Active offers viewers the Meanwhile, skysports.com, which attracts news they want to see whenever they want up to 15 million page impressions every to see it, as well as a daily poll where they month, also allows viewers to voice their can react to events that touch their lives. views and place bets online. Sky News Active, launched in June 2000, 27 August 1999 is a defining date in sports is the world’s first interactive TV history. That day, football fans service. In line with Sky’s defining promise, watching Arsenal’s Premier League clash it gives viewers the news they want in the with Manchester United became the first format that suits them best. They can switch viewers in the world to enjoy the benefits between real-time news programming, of Sky’s live interactive coverage. Since interactive news, video clips and text then, the distinctive services to ensure they get as close as icon has become a familiar sight on TV possible to events that touch their lives. – Sky News screens around Britain. Using their Sky Since March 2001, Sky digital viewers Foot and mouth outbreak – Sky News Active handsets, football fans can choose from have been able to vote on topical issues four different camera angles, replay by using their handset. Not only has highlights, track players with the PlayerCam, Sky News Active captured the public’s access statistics, even listen to partisan imagination; it has also attracted plaudits commentary provided by the fans – among from within the broadcasting industry itself. other options. We have since added At the latest Broadcast Awards, this interactive features to the other sports we ‘innovative, groundbreaking’ service won broadcast, notably cricket, rugby and golf. the Best Use of New Media Award.

‘In Sky’s interactive football coverage, we have seen the future of televised sports and it works.’ T3, November 1999

14 15 A digital vision for everyone

Advertisers prize Sky One as their link with a prolific – and profitable – young market.

Name: Emily Clarke, Age: 29 Sky One: the success story continues The quality of Sky’s programmes is Welcome to Sky One: the UK’s most indisputable; so is their popularity. Success Favourites: Sci-Fi & Buffy on Sky One popular, non-terrestrial, general attracts success: many of the UK’s finest entertainment channel. It has captured the performing talents are lining up to play their hearts of the nation with a combination of role in Sky One’s continuing success story. brilliant home-grown programmes and hit series from the States. Indeed, many Sky Innovative, creative, entertaining, One imports – from to The challenging. These are the qualities that X-Files; from Buffy to ER – have become define Sky One programmes. To many cultural icons. people, Sky One is synonymous with hit series such as The Simpsons, The X-Files They also make the channel irresistible to and Dream Team. But these classics are younger people: 64% of Sky One viewers matched by the calibre of comedy, drama are under 35. In multi-channel homes, the and documentaries that characterises Sky’s channel consistently draws larger 16-34 productions. So they should be: world-class, audiences than Channel 5, and regularly original content is crucial to delivering the beats BBC2 and ratings in quality, choice and value that our viewers the same age group. The significance deserve. Sky’s growing reputation is based of these demographics is not lost on on the success of series such as Gun Law, advertisers, who prize Sky One as their link The Stretch and Do or Die; entertainment Dream Team – Sky One Dark Angel – Sky One with a prolific – and profitable – market. strands such as Uncovered; dramas such as Dream Team; and comedy hits such as Adding Sky’s interactive features means The People's Harry Enfield. Harry Enfield is Sky One and its viewers are even more just one of many top names attracted to the inseparable than ever. In line with Sky’s Sky Productions roster. Others include digital vision for everyone, we are comedians and ; broadening Sky One’s appeal across all actors Dervla Kirwan, Anita Dobson and age groups. The secret to achieving this ; and writers such as Steven expansion lies in broadcasting even more Leather. As our digital vision unfolds, Sky original, innovative and challenging will be instrumental in broadening our appeal programmes from Sky. to everyone.

Do Or Die – Sky Productions for Sky One The Stretch – Sky Productions for Sky One The X-Files - Sky One - Sky One

16 17 A digital vision for everyone

People are no longer forced to leave home to enjoy the elation and inspiration of the silver screen.

Sky Movies: a multiplex at your Sky Pictures fingertips The calibre of directing, producing and Sky’s inspired use of digital technology has acting talent that Sky Pictures attracts dramatically enhanced the magic that films reflects its starring role at the heart of bring to our lives. People are no longer Britain’s resurgent . Established forced to leave home to enjoy the elation in June 1998, Sky Pictures is dedicated to and inspiration of the silver screen. Instead, commissioning, producing and financing Sky Movies now brings them the choice, mainstream films with commercial appeal. quality and entertainment once associated In other words, it brings audiences the very with multiplex cinemas. best of British film entertainment – on small Our digital, interactive text service adds an exciting screen and silver screen. To date, Sky dimension to established TV text services such as Name: Mark West, Age: 22 Teletext and . Sky Text has the look and feel The Sky Movies multiplex boasts a Pictures has released a number of films of a website, and offers just as many benefits to formidable selection of screens. Sky to public and critical approval. Its first two Favourites: Sky Movies viewers across all Sky channels. It incorporates a Premier comprises five channels of movie theatrical releases were both commercial range of interactive features such as e-commerce, entertainment plus shows featuring news, and artistic hits. Saving Grace, starring live video feeds and betting services. views and gossip from the film industry. As Brenda Blethyn and Martin Clunes, won the ever, these programmes are enhanced by Audience Award at America’s prestigious interactive services on Sky Movies Active. Sundance Festival. This was followed by the success of the tough thriller, With five screens, Sky MovieMax offers When the Sky Falls, released in June non-stop action, adventure and hilarious 2000. Now, Brenda Blethyn is set to in comedy. Meanwhile, Sky Cinema devotes another Sky Pictures release, On the Nose, two screens to enduring classics, modern alongside international stars Dan Ackroyd masterpieces, legendary stars and the and Robbie Coltrane. world’s greatest directors. goes from strength to strength, as more Sky Box Office subscribers pay to see the very latest box- Sky Box Office epitomises Sky’s talent for office hits; and a growing number of sports giving people quality, value and choice – and music events. where they want it, when they want it. The channel goes from strength to strength, as The latest addition to Sky’s interactive more subscribers pay to see the very latest portfolio, Sky Movies Active, builds on the box-office hits and an expanding selection popularity of Sky Sports Extra and Sky of sports and music events. Viewers can News Active. It offers a choice of eight video choose from up to 25 movies every night: screens, running trailers of forthcoming from explosive action spectaculars to attractions on Sky Box Office and Sky’s hip indie creations. There is no waiting: three movie channels: Premier, MovieMax movies start as often as every 15 minutes. and Cinema. In addition, movie fans And viewers can access their choice at The Mile – Sky Box Office can browse local cinema listings, enter the touch of a button on their digital Big Momma’s House – Sky Box Office competitions, enjoy off-screen news and remote control. gossip, and buy . The first service of its type in the UK, Sky Movies Active is leading the next generation of Sky’s interactive TV services.

Saving Grace – Sky Pictures Being John Malcovich – Sky Box Office

18 19 Name: Andrew, Mark & Luke Collins, Ages: 10, 7 & 9 Favourites: Pokémon & The Simpsons on Sky One

Pokémon – Sky One The Simpsons – Sky One

20 21 A digital vision for everyone

Sports fans, headline watchers and shopping enthusiasts already testify to the benefits of Sky’s interactive technology.

Sky Interactive: the future of sky.com: gateway to information broadcasting and inspiration Sky’s interactive services epitomise Our flagship website – sky.com – is our talent for harnessing leading-edge consistently among the UK’s top five most technology to enrich people’s lives. visited sites, a gateway into a world of The success of services such as Open, information and inspiration. Supremely Sky Sports Extra and Sky News Active user-friendly, it incorporates some of the symbolises the changing relationship most sophisticated design and technology between viewers and their televisions, a on the Internet. change that Sky has been instrumental in catalysing. It features pages from Sky One and Sky Sports, e-commerce links, and content from We understand that viewers are no longer external contributors. sky.com also offers content to act as passive targets for visitors numerous value-added benefits, broadcasters and advertisers. Instead, they such as free web access, e-mail and even demand more control over the information an online diary. they access and how they access it. Sky’s interactive services deliver this control at the Upwardly mobile touch of a button in a choice of formats. In June 2000, Sky joined forces with Sports fans, headline watchers and to offer a news service to mobile phone Harrods and Sky One – Sky interactive Tetris – Sky interactive shopping enthusiasts already testify to and PDA (Personal Digital Assistant) users. the benefits of Sky’s interactive technology. The move was part of Sky’s commitment So do our advertisers. Now we are offering to rolling out its digital vision across every the same benefits to movie buffs (Sky possible platform. sky.com/mobile carries Movies Active), children (interactive games) up-to-the-minute news from Sky News and and even punters (Surrey Sports Bet TV). Sky Sports. The development of leading- More to come? You bet! edge services, such as audio , is underway.

Names: Paul Sallon & Jeremy Shearing, Ages: 26 & 28 Favourites: Sky Sports & Sky Sports Extra Sky’s website ranks in the top five of the most visited sites in the UK.

Sky’s interactive service offers a range of viewing options.

Sky’s commitment to bringing content to customers via a range of delivery platforms has been enhanced by the accessibility of sky.com news and sports information via WAP and PDA (Personal Digital Assistant).

22 23 A digital vision for everyone

Through interactive technology, we are revolutionising the relationship between advertiser and consumer.

Sky Ventures Sky Advertising Through Sky Ventures, we continue to forge Sky offers a platform that advertisers and mutually profitable partnerships with proven sponsors simply cannot afford to ignore. broadcasters who share our passion for The demographics speak for themselves: quality, value and choice. Established in contrary to the mythical stereotype, over half 1997, Sky Ventures aims to maximise the of our viewers live in the UK’s most affluent power of the Sky brand by establishing households. We are particularly popular profitable niche channels and services, and among 16-34 year-olds with relatively large by identifying joint venture opportunities. It disposable incomes. Little wonder that our currently holds an interest in nine separate advertising revenues have accelerated faster businesses that broadcast between them 16 than the Retail Price Index; little wonder that television channels and 47 audio channels. we account for over 20% of the television broadcast sponsorship market. Sky Ventures’ partners include some of the most prestigious names in broadcasting Through the ingenious application of and entertainment, including – among interactive technology, we are revolutionising others – Granada, Paramount, Nickelodeon, the relationship between advertiser and The History Channel, Manchester United, consumer. Sky viewers are no longer forced National Geographic and the pioneer of to absorb advertising messages passively. television shopping, QVC. Sky Ventures Instead, they can respond immediately to an Buzz Aldrin on the moon – The History Channel Miami Vice – Granada Plus offers our partners comprehensive advertisement using the interactive features management, creative and technical on their digital remote control. support, as well as guidance on programming, marketing, advertising Typically, we have not confined this and cable distribution. fundamental shift to television advertising. We also integrate the benefits and In addition, Sky Ventures continues to excitement of interactive advertising within develop interactive, e-commerce and our Internet sites, Sky Text, and shopping online opportunities across its portfolio. through Sky Interactive. One vital factor in Name: Claire Skelton, Age: 32 This ensures that all Sky’s broadcasting our success as an advertising platform is the partners are fully aligned with our digital skill and dedication of our media, advertising Favourites: QVC The Shopping Channel vision for everyone. and sponsorship teams. Working in close & National Geographic partnership with our clients and their agencies, our specialists are instrumental in creating memorable campaigns for some of the world’s most powerful brands.

QVC The Shopping Channel National Geographic Channel

BT are one of the top ten advertisers on Sky.

24 25 A digital vision for everyone Channels on digital satellite

28 19 21 Premium, A La Carte and Bonus Channels News and Documentary Channels Entertainment Channels

Artsworld Travel Channel Sky News Active Sky One MTV Skysports.comTV Star Plus Bloomberg UK Gold Sky Premier 1, 2, 3, 4 & CNBC UK Gold 2 Sky Moviemax 1, 2, 3, 4 & 5 Discovery Channel Granada Plus Sky Cinema Discovery Channel +1hr Challenge TV Sky Cinema 2 Discovery Travel and Adventure Paramount Comedy Film Four Discovery Sci-Trek Sci-Fi Film Four + 1 Discovery Civilisation UK Drama Film Four Extreme 40 Discovery Wings Tara TV 13 02 Film Four World Non-Subscription Channels Discovery Animal Planet Hallmark Music Channels Sports Channels Sky Sports 1 National Geographic Channel E4 Sky Sports 2 BBC1 National Geographic Channel +1hr Living MTV Skysports.comTV Sky Sports 3 BBC2 Adventure One MTV Hits British Sky Sports Extra BBC Choice The History Channel Discovery Home and Leisure MTV Base MUTV BBC Parliament The History Channel +1hr Granada Breeze MTV 2 Star News BBC Knowledge Biography Granada Men & Motors VH1 Disney Channel Channel 4 (plus and S4C2) UK Horizons VH1 Classic Disney Channel +1hr Channel 5 UK Horizons +1hr UK Style The Box Toon Disney BBC News 24 [.tv] Discovery Health Kiss Playhouse Disney CNN Wellbeing Q PLAY uk Rapture Community Channel Kerrang! Channel Health MTV Dance Liberty TV Smash Hits Whereits.at Gamenetwork Fashion TV Extreme Sports ITN News 17 Subscription Channels The Einstein Channel Sky Sports 1 Boomerang Fox Kids Sky One The Racing Channel TCM B4U Movies TV Travelshop B4U Music TV Travelshop 2 TV Asia Shop! Zee TV PIN Zee Music Asia Shopping Zee Cinema Screenshop Bangla TV Shop America Pakistani Channel 90 Bid-up.com 09 82 Pay Per View Channels Kids Channels Audio Channels Prime TV The Travel Channel Channel East Travel Deals Direct Lashkara 61 SBO screens God Channel Cartoon Network 44 Channels Cee TV 1 SBO Events Inspiration Cartoon Network Plus 38 Radio Channels Gurjari TV 1 SBO Preview Simply Shopping Nickelodeon Anjuman 16 U>direct screens TV Job Shop Nickelodeon Replay Playboy TV and The Adult Channel 1 U>direct sports channel Phoenix CNE Channel Nick Jr. /The Fantasy Channel 1 U>direct preview channel Dating Channel Trouble 5 18+ channels QVC Fox Kids 4 adult channels Asia 1 TV Fox Kids +1hr Discovery Kids

26 27 A digital vision for everyone At a glance

Split of turnover Employees Recruitment 2000/2001 BSkyB’s number of employees has BSkyB is actively striving to recruit nine months ended 31 March grown dramatically in recent years employees of the highest calibre. Online following the launch of digital television recruitment through the intranet and internet 4 and the development of new markets. ensures we reach as wide an audience as 3 95% possible – so embracing diversity. DTH subscribers now digital

2 Development Employees are our greatest asset. To 1 ensure we continuously nurture their skills and talents, BSkyB is wholly committed to employee development which encompasses £289 critical business needs. 1 Direct to home 66.7% Average revenue per DTH subscriber 2 Wholesale 16.7% 3 Advertising 12.0% 4 Other 4.6% Churn rates Digital and analogue subscribers

2000-2001 9.9%*

1999-2000 10.5% 1998-1999 13.4% 9.9% Churn rate at end of March 2001 *Nine months ended 31 March 2001

Split of operating costs Average revenue per DTH subscriber, Awards Royal Television Society Sports Awards pre exceptional items including subscription and pay-per- Royal Television Society (2000) Sports Coverage of the Year (1995) 2000/2001 view income nine months ended 31 March Journalist Award for coverage Sports Broadcaster of the Year (1996) of the Kosovo crisis Best Commentary of the Year (1997) 01 £289* Gold Award for outstanding services Best Live Outside Broadcast (1998) 6 5 00 £287 to television Sports Award of the Year (1998) Programme of the Year (1999) 4 *Nine months ended 31 March 2001 What Satellite TV Awards (2001) Sports Innovation of the Year (1999) Best current affairs programme – Sports Programme of The Year (2000) 3 Sunday with 1 Sports Innovation of the Year (2000) Best satellite innovation – Sky News Active AJIJIC Festival Internacional de Cine (2000) BAFTA Broadcast Awards (2001) Jury Award Best Sports Event Coverage (1998) 2 Best use of New Media – Sky News Active Production Solutions Award for Federation of European Direct Achievement in Interactive Broadcast 5.4m Marketing (2000) Multi-channel News DTH sales at 9 May 2001 1 Programming 52.7% Best of Europe 2000 – Gold Award for International (2000) 2 Marketing 18.3% Sky Rewards Programme Ground Breaker Award for achievements 3 Subscriber management 11.6% 4 Administrations 7.1% in ‘direct to home’ platform 5 Transmission 5.2% Smithsonian Laureate Medal 6 Interactive 5.1% Digital DTH subscribers Award (2000) Total number of subscribers by quarter for nine for Sky’s pioneering use of information months ended 31 March 2001 technology Q3 5.1

Q2 4.7 Q1 4.1

28 29 A digital vision for everyone Watching everyone We talk to our customers to find out what they think of Sky’s services.

No wonder everyone’s watching Sky. After all, we “Variety and the quality provide good coverage devote so much of our time, talent and money to of the areas we live in. You wouldn’t be able to watching people. Nothing original in that. We’re simply get this from competitors” following the first rule of business: know your customer. The difference is that we pursue that principle until we “The quality of picture and reach the very heart of people’s fantasies, ambitions sound is just crystal” and aspirations. That’s the secret to touching even more lives – in even more extraordinary ways.

“With all the films that are on, they offer you really good value”

“Entertainment at your fingertips”

“The cost that we pay, you get a good service for it”

“Sky’s profile is like “Reliable established company Virgin, it has a and no reason to doubt them” dynamic reputation”

30 31 Sky Box Office: Sky Box Office: Chicken RunChicken Run Mile Mile The Green The Green U-571U-571 Sky One and SBO images on front Sky One and SBO images on front Sky One and SBO images on front and back coversand back covers Sky One:Sky One: Do or dieDo or die The X-FilesThe X-Files PokémonPokémon

Designed and produced by Carnegie Orr +44 (0)20 7610 6140.

32 That is how we are building our digital vision. And one thing is certain: everyone is building our digital That is how we are watching us do it. Ultimately, we will transform people’s trusted TV sets into dynamic, compelling, interactive trusted TV sets into dynamic, compelling, will transform people’s we Ultimately, failed to become: TVs will become what PCs have personal entertainment centres. services. Such a the whole range of digital offering seamless, integrated platforms them. It will also will attract new customers and enable us to retain compelling offer each subscriber money on our services. Currently, more encourage customers to spend to that figure In 2005, we aim to raise Sky services annually. spends just under £300 on choice, better value, the best service. even greater to offer £400, giving us the revenue A virtuous circle! In fact, we aim to have 7 million digital subscribers in 2003. Of course, achieving that digital subscribers in 2003. Of course, achieving In fact, we aim to have 7 million our amazing investment levels. This is essential to reinforce target means sustaining high best possible service. choice and better value underpinned by the brand with even more What we do not have is a sense of complacency; and we never accept the status quo. of complacency; and we never accept the status What we do not have is a sense for The Next Big Thing: the killer application, the searching relentlessly Instead, we are experience. Pioneering our digital the perfect entertainment technology, breakthrough our determined to share What next? We’re that search. vision was a crucial step in 21st as possible as we establish ourselves at the heart of vision with as many people century living. In short, we know we have an amazing brand. we have an amazing In short, we know Whatever will people think of next? Answering this question is the challenge that drives this question is the challenge people think of next? Answering Whatever will a passion have We minds, into their hearts. people’s thrive on getting into We us forward. not mind taking the do aspirations. We their fantasies, ambitions and for unlocking to resources the talent, technology and because we know we have occasional risk, entertaining, challenging. creative, inventive, by remaining dreams fulfil people’s The challenges ahead challenges The A digital vision for everyone vision for A digital