Open, the trail-blazing interactive home shopping subsidiary of satellite broadcaster BSkyB, is due to be axed having racked-up losses of over £116 million in the half-year to December 2000.
Sky is the controlling partner in the Open consortium – formerly known as British Interactive Broadcasting with four equal shareholders: Sky, HSBC Bank, Matsushita and BT. Only BT now retains an equity stake (of 19.9%) and is expected to exercise its right to compensation following the closure.
Sky aims to absorb Open into its own new media operations under the control of Jon Florsheim, director of sales, who also doubles as Open’s managing director. Disappointing sales are the underlying reason for the closure which could see the layoff of many of the 620 staff working both at Open and in Sky’s new media unit.
Although Open had generated 650,000 retail orders as at February 28, revenues came nowhere near the costs of running the business, which included a handling fee paid to HSBC and Matsushita for each order processed.
The retrenched operation is expected to focus on areas such as online betting and the marketing of product lines directly associated with Sky programming.
News source: The Times (London)