Satellite revolution

The pace of change in the world of satellite is increasing due to free-to-view options and new channels from terrestrial TV companies.

The evolution of satellite television continues, fuelled by Freeview, which sells 200,000 boxes a month; the launch of Freesat from Sky; the availability of Top Up TV; and the introduction of Sky Plus technology. By the end of this year 55 million households are expected to have switched from terrestrial to digital, and the terrestrial TV giants are now taking satellite seriously – ITV has launched ITV3, and Channel 4’s More4 will soon follow.

The battle for carriage, viewers and revenue is fierce – witness Sky’s huge rebranding campaign, its expenditure on the US drama 24, and the cross-promotion on ITV.

This evolution poses many questions, including how far will pay-TV go and what are the implications for advertisers?

Evidence from Sky suggests that people are, up to a point, prepared to pay significant amounts to have access to more television. For instance, 60 per cent of Sky’s subscribers pay over £30 a month for a Sky World package; top-tier subscribers pay over £610 a year including the licence fee. But to reach its target of 8 million subscribers, Sky must attract more customers by paring down its 16 package options and offering lower entry costs.

Technology offers the potential for growth: data shows that Sky Plus subscribers are least likely to churn, while Freesat from Sky offers it a solution for those people who will not pay a lot more for extra channels.

Competition is welcome from an advertiser’s perspective because different channels offer distinct profiles and targeting opportunities. But audiences are to an extent cannibalised and the end result is lower average ratings. In 1999 the 48 channels measured by BARB delivered an average rating of 0.19, now 145 channels deliver an average rating of 0.05, and the gap between the big and the small channels is growing (this year the top 50 satellite channels delivered 85 per cent of all audiences).

The larger channels will fight back, but the smaller channels must avoid further market commoditisation and concentrate on differentiation, selling the strengths of their product. This might be a distinct audience or content for channels such as Discovery, or through research adding value.

Channels must respond to the needs of viewers and must be more aware of the requirements of advertisers that part-fund their existence. E4 is not the sole offender, but it is no longer appropriate for broadcasters to operate a “one policy fits all” approach – channels need dedicated sales teams that can provide advertisers with bespoke schedules that will deliver quantifiable return on investment.

Satellite’s evolution is not yet at an end: there will be more launches and more failures, and viewing habits and the public’s appetite for pay-TV will change. The onus is on the broadcasters, advertisers and agencies to respond to this evolution.

Latest from Marketing Week


Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now


Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.


From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.


Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3703 or email

If you are looking for our Jobs site, please click here