http://www.telegraph.co.uk/money/mai...01/cnsky01.xml
Sky slashes its 'carriage fees'
By Juliette Garside, Sunday Telegraph
Last Updated:
10:59pm BST 31/03/2007
Sky has opened up a new front in its battle with rival broadcasters by slashing the amount of subscription revenue it shares with the owners of pay-TV channels.
As pressure mounts to claw back some of the £60m it stands to lose after withdrawing its channels from cable services,
Sky is attempting to force down the "carriage fees" it hands over to pay-TV broadcasters.
Cuts have been pushed through in a deal with Viacom, which owns MTV, VH1, Nickelodeon and Paramount Comedy. Sky is now understood to be in negotiations with Emap, owner of Kerrang! and The Hits, and Hallmark. Talks are soon to begin with Turner Broadcasting, home to CNN and Cartoon Network.
In some cases the proposal is to cut fees by half or more.
An
executive at one of the pay-TV companies said: "
With a weak cable rival, Sky is in a very strong position. If you are an independent broadcaster in the pay-TV market, where else are you going to go?"
Hallmark, Emap and Discovery, which is understood to have signed a new deal with Sky several months ago, are in a particularly difficult position because they hire Sky's advertising sales house, Sky Media, to sell their own airtime. However, Hallmark and Emap are now reviewing their contracts with Sky Media.
Emap is expected to hand sales to Channel 4, as part of a joint venture between the two. Emap's seven pay-TV channels will be operated by the joint venture, and
a new channel will be launched on Freeview in the slot currently occupied by music station The Hits.
A
source close to the company said: "Sky is working its way round its commercial partners saying
'bad news, we are going to pay you less'. But Emap has development potential for these channels."
A spokesman for Sky said pay-TV channels could always opt to sell themselves directly to its satellite customers rather than as part of bundles marketed by Sky. He added: "
Negotiations are based on the value that a channel brings in attracting and retaining customers. We don't control access to the satellite platform but
our partners choose the long term security and economic benefits that come with being part of our packages."
Sky earned £3.1bn from its 8m satellite subscribers in 2006.
It handed £323m back to channels provided by third parties, a fall of 11 per cent on the previous year."
Join CF
You are here: 
Data Protection Public Register
