The goldmine in the sky: As the satellite belt gets crowded, broadcasters rally for star wars

ROY THOMSON'S description of Scottish Television in the 1960s as 'a licence to print money' was considered insufficiently virtuous by the licensing authorities, who then forced him to stick to newspapers, among them the Times. Last week, Rupert Murdoch, present owner of the Times, made it clear that he too regards television as a licence to print money - lots of it, beyond the late Lord Thomson's wildest dreams. But because Mr Murdoch's BSkyB satellites are part of what one media expert describes as 'a virtuous circle' around the earth, the enrichment process is unlikely to be interrupted.

The 'virtuous circle' (the phrase comes from Paul Davies, deputy editor of Satellite TV Finance, one of six British specialist magazines to have sprung up within the past decade) is best observed from a 15-storey building in Geneva. On a wall of the International Telecommunications Union on the Place des Nations is a large map. At its centre is a colourful globe, the earth. Surrounding the earth is an elliptical line, far out in blue space. Tiny arrows bombard this line from 446 'geostationary' satellites launched since 1970 - a hundred of them receiving and retransmitting television programmes to all the earth's continents and to ships at sea.

The map's detail is as dizzying as a malfunctioning television screen. Precise locations are given for spacecraft with mysterious names: Eutelsat, Copernicus, Prognoz and, barely identifiable 36,000 kilometres above the equator, Astra 1B, one of the European satellites used by BSkyB. Countries of origin are listed: 138 satellites launched by the former Soviet Union, 126 by the United States, six by Britain, 17 by France. Through lines, arrows and codes, one stares into the future.

Although fewer than a quarter of the map's satellites deliver public television programmes - the remainder have other purposes, among them military intelligence and telephone systems - more are being cast into space every year. By the year 2000, the number of television satellites alone will have exceeded 370.

The circle may be less virtuous by then, because a great battle is looming between two giants: Murdoch and Ted Turner, boss of Cable News Network. CNN's global dominance has remained virtually unthreatened since Turner launched the now legendary network in 1980. But Murdoch, half-owner of BSkyB in Britain, chairman of Fox Television in America and about to become a major satellite television operator in Asia, is moving in fast with seductive viewing 'packages' and linkups with multinational networks. Against this background approaches a price-cutting war in the satellite- launching business, with American and European launchers lining up against the cheaper Russians and Chinese with a venom reminiscent of the Cold War.

In the Murdoch-Turner battle, there are strange alliances. A BBC news deal with the American ABC seems at variance with an ABC deal to sell news and magazine shows to Sky News, a BBC rival; in Hong Kong Murdoch has acquired a controlling stake in Star TV, which carries BBC Television World Service programmes. Responding to the Beeb's link-up with Star - the most powerful satellite-distribution system in Asia - CNN launched a week of live programming from Hong Kong and Tokyo. Such jostlings, mergings, overlappings of interested parties can be extremely confusing. 'Knowing just who the players are and who their allies are becomes increasingly difficult,' said a recent New Yorker article, 'Raiding The Global Village'.

'The global village' is a phrase coined by Marshall McLuhan, the Canadian theorist of communication, in The Gutenberg Galaxy, published in 1962. Looking at the Geneva map, the galaxy already looks overcrowded. There is even a hint of orbital anarchy. The other day, a row over control of Asian satellite slots intensified when one company began manoeuvring an ageing Russian satellite into a slot where another company had parked one of its orbiters.

There are other confusions concerning the global village. According to CNN's Ted Turner, ruminating recently on the market for satellite and cable news, 'Nationalism is not growing. Internationalism is growing. Look at the growth of the United Nations.' Yet he concedes: 'Localism is strong. I know that.' In other words, it is all very well getting instant international news from CNN or BSkyB, but what if you would like a satisfying dollop of local 'village' news? This question may become increasingly pertinent if satellite television finally eclipses terrestrial stations.

The Geneva map prompts thoughts of conflict in other areas: nervousness in Islamic countries such as Saudi Arabia over programmes beamed from space with messages morally or politically unwelcome in Riyadh; resentment by Singapore and Malaysia at a Western monopoly of space transmissions. Some countries (Libya, for example) ban dishes altogether, while Iraq allows only one (it belongs to Saddam Hussein). There is anxiety throughout the Middle East about people picking up Israeli television, and red faces in Britain over hard-core pornography which Red Hot Dutch was beaming from Holland before fleeing to Denmark.

Nevertheless, for the moment, the licences to print money look fairly safe. The satellite dish, derided for years as a symbol of 'council-house culture' is enjoying a better profile. According to an article in Mr Murdoch's Times last week, 43.3 per cent of all British satellite viewers are in the AB and C1 socio-economic groups.

This statistic accompanied an article announcing a new BSkyB service that is likely to change fundamentally the nature and finances of the industry. Satellite viewers will be able to choose from a number of multi-channel packages, starting with a 14-station deal at pounds 6.99 a month and rising to a 'complete' package, including BSkyB's three movie channels and its sports service, at pounds 19.99 a month. The new service will end free access to satellite channels such as UK Gold (old programmes for couch potatoes), The Children's Channel (for sofa seedlings) and Sky One (entertainment).

By the end of the century, according to most estimates, 5.6 million British households will have satellite television, compared with 2.5 million today. With the recession not quite over, cable and satellite channels are steadily eating into the viewing market. In 1992 they accounted for 10.4 per cent of all commercial television viewing; by 2003 they will account for 26.6 per cent. Terrestrial stations, particularly the independents, are feeling the chill. The ITV companies are 'caught in a vicious circle', Paul Davies says.

The vicious circle works as follows: ITV companies rely entirely on advertising revenue from finite sources; satellite companies have moved in on these sources; ITV suffers, but the satellites can augment their revenue with subscriptions, such as for the encrypted packages just announced.

Meanwhile, says Julian Clover of Cable and Satellite Europe, another specialist magazine, 'there are signs that instead of renewing faulty terrestrial aerials, viewers are choosing to go for Sky dishes or cable television.' Elsewhere in Europe, the 'terrestrials' are straining skywards. Later this month, the German television companies, ARD and ZDF, will be transmitting from an Astra satellite, having realised, as Mr Clover says, that 'once you put down your terrestrial remote control and pick up your satellite remote control, you tend not to go back.'

The technology for launching television satellites has greatly improved since 1988 when an Ariane rocket launched Astra 1A into low earth orbit - a journey of 24 minutes - and, propelled, four days later, into geostationary orbit. Small children from satellite dish-owning homes can converse knowledgeably about polarisers, encryption, actuators, transponders, loopthrough and the Clarke Belt (named after Arthur C Clarke who found the orbit, at 36,000km or 22,250 miles, in which satellites could travel around the earth in 24 hours, yet remain in a fixed position relative to the earth's surface). Fixed dish systems, locked onto certain channels, are giving way to motorised dishes capable of grabbing a wider variety of channels at the press of a button. The dishes themselves have become less of an eyesore, the matt-black translucence no more objectionable than terrestrial antennae. Yet the money involved in launching satellites is no less daunting than in 1988 - up to dollars 90m ( pounds 60m) by Western companies, against the dollars 25-35m cut-price offers about to come from the Russians and Chinese.

Given that the average lifespan of a satellite is only about 15 years, the Clarke Belt may be pretty cluttered before long. Although it is technically possible to carry out repairs in space (as the American Space Shuttle crew have proved), it is considered easier and cheaper to send up a replacement (as the Germans did when the arms of their TVSat1 failed to open). Sometimes companies choose to share satellite space, but this is not cheap. CNN's decision early on to lease space on 12 satellites (which relay signals from 19 overseas bureaux 24 hours a day) gave it a marked advantage over competitors. To rent space on a satellite now costs more than a million dollars a year.

How much does it cost to watch satellite television? For a fixed-dish system with a Sky decoder built in, one can pay anything from pounds 199 (Amstrad) to pounds 479 (Mimtec). Motorised systems are more expensive, ranging from pounds 429 to pounds 1,500. For these costs, plus monthly subscription charges, you may have a wide variety of films, sport, music, variety and games shows. You will also have the chance to watch David Frost interviewing someone on the BBC on Sunday morning and again, an hour later, on Sky.

In his latest editorial, Mr Clover's editor, Paul Barker, ponders the BSkyB's multi-channels package and its affect on 'the man on the Clapham omnibus', pointing out that Britain's fledgling cable industry is pounds 6 per month more expensive than Sky's pounds 6.99 direct-to-home basic package.

Despite the risks - and enormous capital investment - it is hard to see how BSkyB can lose. Last year it broke even. This year it has operating profits estimated at between pounds 52-60m. Next year it may well start paying back its shareholders. As Roy Thomson spins unhappily in his grave, Rupert Murdoch does so contentedly on his axis.