SKYNOW BY CONTENT UK - 74% EUROPE - 10% USA - 5% ROW - 11% SKYNOW WEB TRAFFIC SKY CUSTOMERS - 66% NON-SKY CUST'S - 34%

New Media Broadband technology is dramatically changing the delivery of entertainment, information and communication across all types of hardware. Content and technology can no longer be considered separately, as broadband continues to blur the relationship between them. BSkyB has a key role to play in developing broadband services in the UK. We already use broadband technology to deliver Sky digital. We are also exploiting broadband technology to create an amazing range of new services. Full motion video is an important component of all broadband distribution systems. It is also what we do best. The challenge of broadband is to successfully integrate interactivity and video. To wrap video around interactive components to deliver content that is truly stimulating. We are overlaying interactive applications on television to create Sky Sports Extra and have introduced full motion video on our website, bringing together broadband content and interactivity on both platforms. Easy, exciting, affordable Internet We launched Skynow in June 1999 to build on the success of our website which was already the tenth most popular content site in Britain. Skynow provides our customers with free access to the world-wide web. Skytalk customers can also receive 40% off BT basic rates for calls to the Internet. As a portal, Skynow is a gateway to the Internet. But as a 'sticky site' it is much more than that. By 'sticky site' we mean a place where people want to stay, rather than just a way of getting on the Internet. People spend time on our website because it offers fantastic content sites created by Sky One, Sky Sports and Esquire Magazine. It provides easy-to-use navigational tools to help them get around the web, as well as e-mail, diary and help facilities. Of course, it also gives us the chance to promote great deals on BSkyB products and services. Early in 1999 we agreed a mutually beneficial relationship with AOL, the world's leading Internet service provider. We have already put in place other content and marketing arrangements and are now in the process of extending our relationship by working to develop broadband content.

Interactive and enhanced television can be accessed through the Sky digital remote control. All at the touch of a button.

Interactive television Interactivity is changing television - and the way we live - forever, bringing a comprehensive range of interactive services right into the living room. Developed by British Interactive Broadcasting ("BiB"), Open will be brought to you first by Sky digital. Open is a state-of-the-art interactive platform owned jointly by BSkyB, BT, HSBC and Matsushita, the owner of Panasonic. Open’s preview service is now in all digital satellite households ahead of its autumn launch. Open will enable Sky digital customers to play, shop, bank, explore, respond to and communicate with the world. All through the most familiar and intensively used medium in the home - the television set. Abbey National, Argos, Carphone Warehouse, Dixons, Domino’s Pizza, Going Places, HSBC, Iceland, Next, Somerfield, WHSmith and Woolworths are throwing open their doors to a mass TV audience. We are confident that many more retailers will follow. Over the coming months, Open will continue to develop, offering consumers e-commerce, TV banking, e-mail and interactive advertising. Enhanced television BSkyB will be the first broadcaster in the UK to launch enhanced television. Once again, we will prove ourselves as television pioneers, by using the additional bandwidth available through digital to offer our customers more. More personalised services, more choice and more information. In August 1999, we will launch enhanced television through Sky Sports Extra, only available on digital satellite. Soon enhanced television will change the way we view Sky News. Then our customers will be able to access highlights of the big match and watch the latest news headlines, whenever they like. All with their chosen programme in view and all at the touch of a button. Developing new technologies At BSkyB, it is our aim to supply outstanding entertainment and information across all platforms. We are currently investigating delivery through Asynchronous Digital Subscriber Lines ("ADSL") and Data Broadcast Networks ("DBN"). ADSL is a new technology that uses the existing telecommunications network to provide movies, full motion video, and super- fast, always-on Internet access. All down a standard telephone line. We are currently taking part in extended ADSL trials in West London with BT and with Kingston Communications in Hull. We are also investigating the possibilities of DBN. DBN uses satellite to transmit large amounts of information to earth at speed and then distributes it using an existing copper wire infrastructure. For example, the technology will allow customers to access the Internet quickly and then download games and music almost instantly.