British Satellite Broadcasting (BSB) was a company set up in 1986 to provide direct broadcast satellite television services to the United Kingdom. The BBC had previously proposed its own satellite service, but pulled out when the Government insisted that the BBC should pay for the satellite's construction and launch. BSB was initially granted a licence to operate three channels. Licences for two more channels would be put out to tender. BSB was also required to pay for the construction and launch of two satellites, named Marcopolo 1 and 2 after Marco Polo, jointly capable of broadcasting five channels that could be received on 30cm (12") diameter dishes.
As Britain's official satellite provider BSB had high hopes. The company planned to provide a mixture of highbrow programming and popular entertainment, from arts shows and opera to blockbuster movies and music videos. The service would also be technically superior, broadcasting in the MAC (multiplexed analog components) system, with potentially superior picture sharpness, digital stereo sound and the capability to show widescreen programming, rather than the existing PAL system.
Then in 1988 Rupert Murdoch announced that Sky Television would be launched in 1989 using the European Astra satellite. BSB did not initially consider this a serious threat. Sky's four channels would be broadcast in PAL with analog sound and would require 60cm (24") dishes. BSB ridiculed Sky's proposals, claiming that the PAL pictures would be too degraded by satellite transmission, and that in any case BSB had superior programming.
To distance itself from Sky and its dish antennas, BSB announced a new type of flate-plate satellite antenna called a "Squarial" (i.e., "square aerial"). Unfortunately, the prototype Squarial shown to the press was a dummy; BSB eventually commissioned a working version from a Japanese company, but it was almost 45 cm (18") in width. The company also had serious technical problems with the development of its MAC receivers. When Sky went on air in February of 1989 BSB was still hoping to launch that September, but eventually had to admit that the launch would be delayed. The only compensation was that since no one else had come forward to operate the two spare channels, BSB now had a licence to operate five channels rather than just three. The company continued to promote its new improved Squarial with the slogan "It's Smart to be Square".
Unfortunately the successful launch of Sky had proved two things. First, the PAL system gave perfectly adequate picture quality; and second, many people were quite happy to watch Sky's "lowbrow" programming and not wait for BSB's promised quality output. Sky also had lower overheads. BSB had an expensive headquarters in Battersea, south London, while Sky operated out of a west London industrial estate.
When BSB finally went on air in March 1990, more than a year after Sky, its technical problems were resolved and its programming was excellent. But its receivers were incompatible with Sky's, and also more expensive. Many potential customers saw the competition between the rival satellite companies as being like the competition between the VHS and Betamax video systems, and many of them decided to wait and see which company would succeed rather than committing themselves to buying equipment that might soon be obsolete.
In October 1990 an enterprising manufacturer came up with a dual satellite dish that could be used to receive both Sky and BSB services, although separate receivers would still be required. It was almost instantly obsolete. BSB announced a merger with Sky in November 1990. Quality programming and superior technical quality had been no match for shrewd and aggressive marketing. The channels merged and eventually the Marcopolo satellites were closed down and sold to other satellite operators. BSB's expensive headquarters later became the home of ITV Digital.