BSkyB parachuted Rupert Murdoch's youngest son, James, in as its new chief executive this week after months of speculation tipping him to succeed outgoing CEO Tony Ball.
The younger Murdoch, fresh from a successful stint at Asian broadcaster Star TV, comes to the post amid concerns over his age and qualifications - as well as questions about his plans for the future of the digital broadcasting giant.
He joins his father Rupert, chairman of both BSkyB and News Corp - which owns a 35.4% stake in the UK broadcaster - at a time when the digital behemoth is at the top of its game.
BSkyB recently announced its first full year of profit since 1998 and has signed up seven million subscribers ahead of target.
That, combined with a 13% growth in advertising revenue over the past year in a tough advertising market; the negotiation of reduced rates for the channels it carries on its platform from third parties, and the completion of a number of key sports rights deals - including Premier League Football and the UEFA Champions League - has left the broadcaster in a strong position as Murdoch takes over.
Some industry players this week suggested that Murdoch would enjoy an easy ride as Ball had already laid the groundwork for future success.
"All the major strategic decisions in the short to medium term have been taken. The business is already on a sound footing," said Paul Curtis, managing director of Viacom Brand Solutions.
Paul Richards, an analyst at Numis Securities, added: "Sky is a superb operating machine - I'm sure that they'll hit their eight million subscriber target."
The new subscriber target will be the first challenge for Murdoch Junior. In August, Ball announced BSkyB was aiming for eight million subscribers by the end of 2005. Although subscriber levels for the broadcaster are growing, they have slowed and it will be Murdoch's job as the new chief executive to keep up the growth momentum.
He will also face a tough task in raising the average earnings per subscriber that BSkyB makes from the current 拢364 a year to 拢400 by 2005.
"The majority of Sky's focus now will be on average revenue per user. They will continue to concentrate as much on the people who've got Sky as they will on getting more people to pick it up," said an analyst.
There are other, bigger, challenges ahead. "The issue is where to go," said Numis' Richards. "Is there a free-to-air route that they can develop?" The UK media industry has been stunned by the popularity of the free-to-air terrestrial platform Freeview, which is a joint venture between the BBC, BSkyB and Crown Castle.
BSkyB relies primarily on subscriber revenue for its income and the growth of a free-to-air platform has converted an estimated two million digital TV refuseniks since it launched in October last year.
Murdoch will have to decide whether Sky wants to get into that market. "They're going to have to look at how they go on given the challenge of Freeview," said one analyst.
Ball mooted the launch of a free-to-air satellite package at this year's Edinburgh TV Festival and there is also talk of the launch of a new terrestrial channel, dubbed Channel 6, that would compete with BBC1 and ITV1.
Sky has also failed to hit the spot with its domestically produced programming and Murdoch will face having to turn that around. The appointment of Dawn Airey last year as managing director of Sky Networks was intended to boost the broadcaster's programming strategy, but its flagship channel Sky One is continuing to struggle in the ratings race and the three music channels that it launched earlier this year are under-performing.
Murdoch's appointment was greeted with dismay by the City.
Investors are concerned about the presence of father and son at the helm of the UK's 19th largest company and worried that the selection process, which led to his instalment at the throne of BSkyB, lacked transparency.
"We were dismayed at James Murdoch's appointment, though hardly surprised," said Iain Richards, head of corporate governance and public policy at Morley Fund Management.
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