Virgin snubs BSkyB peace deal

[BGonaSTICK]

Virgin Media customers will remain without shows such as Lost and 24 after the cable group rebuffed a fresh attempt by BSkyB to end the acrimonious row over how much Sky charges for its basic channels.

The BSkyB chief executive, James Murdoch, wrote last week to his counterpart at Virgin Media, Steve Burch, suggesting the companies "meet in the middle", after Sky demanded nearly £10m more than Virgin was willing to pay for channels such as Sky One and Sky News.

Sky's final offer when the two sides were negotiating in February was around £40m a year for its channels, while Virgin refused to pay more than £30m.

Mr Murdoch proposed a deal pitched at around £35m as a "straightforward solution" to break the deadlock that has deprived Virgin's 3.4 million cable TV customers of Sky's basic channels since the beginning of March.

"As you will appreciate, this represents a significant ceding of value to Virgin Media on our part," Mr Murdoch wrote.

However, Mr Burch turned down the proposal, accusing Sky of withdrawing its channels from the cable platform after demanding "an extreme and anti-competitive price".

He said Sky's proposed reduction in the amount it would charge "does not make it fair or lawful nor does it promote good faith discussions".

Responding in a letter today, Mr Murdoch accused Virgin of failing to make a "meaningful engagement" with Sky's attempt to resolve the dispute.

"Disappointingly, we can only conclude that you are not genuinely interested in offering Sky's channels to your customers, preferring to continue to deny Sky access to your network as a means of pursuing wider corporate goals, simultaneously harming Sky commercially by denying us wholesale subscription and advertising revenues."

Sky said Virgin had tabled no offer for the channels since February 22, a week before the previous carriage deal ran out and Sky One and other services disappeared from the cable operator's network.

The dispute has been the most visible sign of the acrimony that has developed between the two companies since Sky bought a 17.9% stake in ITV in November, thwarting Virgin's plans to take over the commercial broadcaster.

Virgin has taken its complaint about Sky's carriage charges to the high court, accusing Sky of trying to weaken and ultimately eliminate it with anti-competitive behaviour.

But both sides have admitted the row is damaging them. Sky has forecast it will lose £60m a year in carriage fees and advertising revenues, while Virgin said last week it could lose TV customers in the second quarter of its financial year because of the dispute.

At the company's first quarter results last week, Mr Burch defended his decision to reject Sky's terms.

"When we looked at the cost of what they were asking and what they were demanding and the collective issues we had with Sky ... it was really the only decision we could make," he said.

"We are not cavalier about this - we are comfortable we made the right decision economically for the business and we believe in the long term we made the right decision for the customer."

[Gav]

Sky are being petty. They know that they have something Virgin Media don't, Sky HD. They've already said Virgin aren't getting that, so having Sky:One for £35 won't be the end of the world, they know that Virgin would rather pay Sky a hell of a lot more for its HD channels.

[BGonaSTICK]

I have a feeling it's more to do with wanting to cut as many ties to the old enemy as possible and producing their own themed channels, though I'm not sure that's a winning tactic. Too radical too soon.

Or maybe they're just spoiling for a fight in the courts and want to land a few good'uns on Murdoch's jaw and bloody his nose a bit?

[nanochickin]

They know that they have something Virgin Media don't, Sky HD.

Televest have had HD for quite a long time now so that quote isn't exactly 100% accurate, TBH i'm sure they had it before Sky did.

_http://www.Tele*west.co.uk/html/tvdrive/hdtv.html (remove the asterix)

There are plenty of other channels available that old Richy babe could go for rather than taking his pick from Sky.

There is no reason that i can see why Richards Branson would need to carry any of Skys movie channels, theres nothing really stopping him starting his own movie channels. It would also be interesting if he bid for the footy aswell.

That would really nark uncle Rupe :roflmao:

The only thing that is stopping them introducing more HD stuff is the old hanger ons that won't ditch the old analogue system which is using up valuable bandwidth Apparently from what i have been told by my mate who works for Televest/VM it is using up about 25% of the available bandwidth in our area.

I think analogues days are numbered at VM :'(

[Gav]

I only went from NTL Analouge (after being with Cable:Tel for ages) to digital last year!

I think its simplicity, the older generation love the analogue because its so, so, so simple and easy to use. Also, they get teletext, which again - is easy to use.

If I were Riccy, I'd charge sky an extra £10,000,000 for their channels

They really ought to do a deal with one of the american broadcasting companies, to get some of their programs/channels here (The american shows are often 1 season ahead of ours...)

[wod]

yeah i think branson was trying to do a deal to get some shows from likes of hbo for the on-demand service which if he could would be a killer i think as sky haven't got on demand yet

[Gav]

Sky do have On Demand.

Its called Sky Anytime.