Sky "like a schoolyard bully"

[BGonaSTICK]

Virgin Media president and CEO Steve Burch has accused Sky of acting "just like a schoolyard bully" over a breakdown in carriage negotiations that will result in Sky's basic channels being pulled from Virgin TV at the end of February.

"Sky is clearly shaken by the arrival of Virgin Media. Just like a schoolyard bully, they have been unnerved when confronted with tougher opposition.

"By placing a wholly unrealistic price on their content, they have made a mockery of recent negotiations and have subsequently withdrawn their basic channels from us.

"The audience for these channels has been on the slide since the start of our last agreement, by as much as a third in the case of Sky One. Bizarrely, Sky felt this less than impressive statistic justified a price hike of over 100%.

"Sky also makes a lot of money by distributing these channels to our 3.3 million customers, so their willingness to forego these massive revenues speaks volumes about their real intent, which is undoubtedly to stifle competition.

"Although some of our customers might be disappointed that Sky has chosen to deny them this choice, they can rest assured their entertainment will not suffer. We are committed to investing the significant money we're saving in fantastic new content, including major series for our TV-on-demand service, which lets viewers watch what they want, when they want.

"Virgin Central, our unique new TV channel already features whole hit series like The OC, Nip/Tuck, Grey's Anatomy and West Wing - and it's just the beginning of our TV revolution. In terms of choice, control and value, our customers will find we beat one of those ugly dishes hands down.

"Sky has been entirely unreasonable in negotiations - ie. a ridiculously high valuation placed on their channels. Their huge financial loss (circa £70m in year one) makes it clear their intention was always to deny us these channels. Sky is once again restricting competition and therefore consumer choice. They're doing it because they're scared of Virgin Media."

[BGonaSTICK]

None of Sky's tactics surprise me, and I wish Virgin Media all the luck in the world, but "ugly dishes"?!?!

Come on... it's Virgin who have been carping on about anti-competitive practices. A satellite dish gives you the freedom to choose, even if it is still 'illegal' to pay for cross-border television at the moment.

The fact that some of these issues are coming to a head must surely be good news though. It might even trigger a debate on the whole issue of pay-TV provision in the UK - especially with Setanta firing up on freeview next month too.

We definitely need a second recognised satellite TV provider. WTF happend to the 'Freesat' thing?

[BGonaSTICK]

Sky's reaction to Virgin Media's earlier statement.

Sky is "surprised and disappointed" by Virgin's "premature" announcement that Sky's basic channels would be withdrawn from Virgin TV at the end of this month, the broadcaster claimed this afternoon.

In a statement that pointedly referred to one of Virgin Media's former names, NTL, Sky accused the company of trying to "free-ride" and denied that it - as Virgin claimed this morning - wanted to double the price of channels such as Sky One.

"With several days remaining and active discussions continuing, we're surprised and disappointed that NTL/Virgin chose to attack Sky and suggest, prematurely, that their customers will miss out on Sky basic channels from 1 March," the company said this afternoon.

"Unlike the open satellite platform, NTL/Virgin's cable network is closed. The only way Sky's channels can be available to cable viewers is if NTL/Virgin chooses to carry them.

"NTL/Virgin can't expect to free-ride on Sky's commitment to bring viewers the best TV. They need to decide whether they are going to invest in the programmes that their customers enjoy."

Some details about the ongoing negotiations were revealed by Sky. The most-recently made offer - which the broadcaster said "remains on the table" - includes carriage of high definition services, Sky Three, and Sky Arts.

[BGonaSTICK]

BSkyB has warned investors that the financial impact of not concluding a basic channels carriage deal with Virgin Media could amount to a reduction of between £15m and £20m in operating profit for the remainder of Sky's financial year, ending on June 30.

Sky's statement to the City said the figure included lost carriage fees and lower advertising revenues, but did not include "any of the future benefits or costs associated with accelerated customer growth should cable customers decide to switch to Sky".

Last Friday Virgin Media CEO Steve Burch said he anticipated the withdrawal of Sky's basic channels - which include Sky One, Two and Three, and Sky News - at the end of February after talks broke down between both parties. Burch said Sky had demanded a doubling in the carriage fee, a claim Sky went on to deny. At the weekend Virgin Media took press ads explaining to its 3.3m TV subscribers why the Sky basic channels were likely to disappear.

In Sky's statement this morning, the pay-TV giant said it had negotiated "in good faith" with Virgin Media and had shown flexibility in price. More channels were being offered, and Sky had increased its investment in its basic channels "by 68% over the last five years to around £200m per annum, and as a consequence, the most-watched pay-TV programmes in cable households are on the Sky basic channels".

Sky's chief financial officer, Jeremy Darroch, said: "We are disappointed that Virgin Media appear to have walked away from negotiations. Sky offered more channels to Virgin Media than ever before. We have invested in developing our channel offering and sought a fair price which reflects that fact. With three days still to go before the deadline, we hope that Virgin Media will focus on getting a deal done rather than on their PR offensive."

[BGonaSTICK]

BSkyB is using clips from one of its most popular shows, The Simpsons, to tell cable customers that they will lose basic channels from the platform if Virgin Media does not return to the negotiating table this week.

A similar campaign was aired earlier this month but was pulled after Virgin consulted its lawyers.

A statement issued by Sky said: "Should Virgin decide to ignore the wishes of their customers and drop the channels from 1 March, viewers are also told that they can join Sky."

It added: "The purpose of these communications is to appeal directly to cable customers and encourage NTL/Virgin to return to the negotiating table. Throughout these negotiations, Sky has consistently stressed that its priority is to ensure that cable viewers continue to have access to Sky's channels. The decision is in NTL/Virgin's hands and we urge them to commit to appropriate on-screen investment on behalf of its customers."

The satellite broadcaster has also said the the move would cost it £20 million in lost revenues rather than the £45 million claimed by Virgin Media.

Last week Virgin Media claimed that Sky had asked for double the fee to carry its basic channels which include Sky One and Sky News. Sky has since said that this was its starting offer and that it has now been reduced to a 30% increase.

Virgin Media responded by saying: "These promotions contradict Sky's claims that they want to negotiate with us and demonstrate what we suspected all along: that Sky has no intention of doing any deal."

Meanwhile, Virgin Media has announced a deal with ABC to air the first three series of Lost on its on-demand channel Virgin Central, with the third series available for viewing in August.

[Jimdefruit]

Virgin have slipped up with the 'ugly dishes' comment. Their best option to hit at Rupert's club would be to take some transponder space on 28.5 so that all the existing sky dishes could be pinched together with a few sky subscribers.

[BGonaSTICK]

I think one of the biggest things Virgin have on their side is the strength of anti-Sky feeling and the impression that Virgin are above all the mud slinging and childish, bullying tactics - the underhand digs and game-playing that Sky have employed from day 1. Branson still has a squeaky clean image at this point in time, and Murdoch will be all-out to wreck it.

If VM resort to the same type of warfare, they will be in danger of being regarded as simply a Sky-wanabee. Virgin have a one-time opportunity to unseat Sky as the oppressive force in UK Media. Let's hope they don't blow it will ill-advised comments like the 'ugly dish' one.

Keep it factual, keep it honest, and keep it transparent. That's what people want, even though they realise that plenty of political manoeuvring is still going on behind the scenes.

Just my opinion

[jontydog]

As a VM customer I am not too bothered about Sky one two and three as I never watch them but i will miss Sky Sports News or can you still get that on freeview?

[Gav]

So what? Sky are like Microsoft. VM Are like Apple.

Although I would much rather subscribe to Virgin Media, Sky is way cheaper for me.

TV - £7.50 a month (1/2 Price forever because of what Sky did to my Window with their ladder 8))
Phone - £11 (BT) £5 (Sky) Unlimited UK Calls
Broaband £10 - 16Mbps broadband.

VM Alternative would be about £80 a month.

[BGonaSTICK]

Originally Posted by Gav

1/2 Price forever because of what Sky did to my Window with their ladder

Ahh, I missed that trick! >

I really think that VM will give Sky a run for their money, and ultimately that must be achieved by giving the customer a better value package. NTL were too subservient - didn't want to rock the boat - but now the gloves are off.