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Virgin Media anticipating withdrawal of Sky's basic channels [Updated]

# Feb 23, 05:39 PM by Mick

Virgin Media has released a press release this morning which states the cable group is anticipating a withdrawal of Sky channels. Sky One, Sky Two, Sky Three, Sky News and Sky Sports News, could be axed from the Virgin Media network. The contract for carriage of Sky’s basic channels, runs out at the end of this month. Virgin Media have been negotiating to renew the contract and negotiators from both companies have locked horns.

Virgin Media have stated that the very nature of the negotiations and the outcome of them, have been deliberately engineered by Sky, to suppress competition and coerce Virgin Media’s customers into switching to its service by denying them access to the basic channels.

Virgin Media say this view is reinforced by Sky’s decision to broadcast a series of ads that claimed Sky’s channels were about to disappear from Virgin Media’s network. Virgin Media insists this was a heavy-handed attempt to exert influence on the negotiating process.

In the Virgin Media statement, it says:-

“It remains Virgin Media’s position that negotiations are ongoing and we continue to seek an agreement on terms that make commercial sense for both parties. However, as things stand, Sky’s demands offer no prospect of us being able to reach a commercially viable agreement to continue carriage of these channels on Virgin Media’s platform.

If Sky withdraws its channels, Virgin Media will divert any money saved into continuing the transformation of our TV service with an extensive range of new channels and programming. This will include further additions to our existing on-demand library and ensure our TV service more than matches anything on offer from Sky.

For Sky meanwhile withdrawal will mean an estimated £45 million a year reduction in advertising revenues, over and above the subscription fees they will forego. Their willingness to do so speaks volumes about their desire to suppress meaningful competition.”

Commenting on the anticipated withdrawal of Sky’s basic channels, Steve Burch, President and CEO of Virgin Media said:

“Throughout its history, Virgin has challenged the attempts of dominant corporations to manipulate markets, stifle competition and dictate consumer choice. It has done so simply by giving consumers a better deal and Virgin Media is going to do the same. Sky’s behavior is a heavy handed and anti-competitive response to that challenge and consumer choice has been reduced as a result. I’m pleased, however, that at a time when they’re taking content away, Virgin Media is giving people more.”

In a current members poll on Cable Forum – it was asked what would Virgin Media customers do – if Sky revoked its channels, out of 329 total votes cast, as of this moment, 278 said they would stay with Virgin Media, 51 said they would switch to Sky. Of course this is hardly representative of the millions of current cable TV subscribers but nonetheless, it is interesting to point out that the overall percentages for the poll have remained fairly consistent at 85% wanting to stay with Virgin Media, 15% wanting to leave for Sky.

Virgin Media have stressed though, that premium channels such as Sky Movies and Sky sports, are unaffected and will remain on their network.

Update

A Sky spokeswoman has this evening released a statement following Virgin Media’s press release this morning….

In the statement it says:-

“We just wanted to keep you updated, given what NTL/Virgin have been saying today. First things first, as far as we’re concerned, negotiations are continuing, and we hope these will be completed successfully without anyone missing out on their favourite shows.

We want Sky One, Sky Two, Sky Sports News and the award-winning Sky News to remain available to NTL/Virgin customers. We know that they are missing out on other Sky channels like Sky Three and Sky Arts, so we’ve been talking to NTL/Virgin about these as well.

At Sky, we love great TV. We’ve increased the amount we spend on our channels by more than two thirds over the past few years. That’s why we can bring you great shows like the newest episodes of Lost, 24 and The Simpsons, as well as acclaimed original productions like Terry Pratchett’s Hogfather.

So we hope people will see through angry statements from NTL/Virgin and encourage them to come back and agree a fair price for some of the finest shows on TV.”

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