Virgin One launch planned

[BGonaSTICK]

Virgin Media TV is planning to launch a general entertainment channel on Freeview, in what is the cable group's latest attempt to take on its arch rival BSkyB.

Talk of the offering, which Broadcast understands will be called Virgin One and be available on cable and Freeview, has been gaining momentum following frenzied bidding by the cable group for US shows from the LA Screenings.

According to sources Virgin Media is attempting to do deals with most studios.

One source said: "Virgin Media seems to be trying to buy everything [from the LA Screenings]. The word from the US is it is because they are launching a new channel to take on Sky One."

Virgin Media has also begun commissioning shows from UK indies for the new channel, which will be positioned between its female skewing offering Living and the male skewing Bravo. It is also likely to replace Virgin Media's Freeview channel FTN.

Managing director for Virgin Media TV Johnny Webb is spearheading the initiative.

At present FTN is used as a "shop window" on Freeview, airing taster content from all the Virgin Media channels and receiving little investment.

Sky also has three channels on Freeview, Sky Sports News, Sky News and Sky Three, which it uses as a means to convince viewers to take out a Sky subscription. However, Sky has said it wants to make its Freeview channels subscription offerings and has asked Ofcom for permission.

Virgin Media is also set to seal a deal to create a sports news channel within the next few weeks, with Setanta Sports the most likely partner.

The spat between Virgin and Sky escalated earlier this year when Broadcast revealed Sky had hammered down the cable group's subscriber revenues by approximately 85% in the fees that it pays for Virgin Media channels such Bravo and Trouble and Challenge. Sky told NTL that the only channel it felt worth paying for was Living.

Sky's basic channels have since been removed from the cable platform when Virgin claimed that Sky asked for double the fees for retailing Sky 's basic channels. Sky refuted the claims stating that its offer is a 20% increase on the existing contract or 3p per customer per day, and not double.

Virgin has started legal proceedings against Sky arguing that the satellite giant, which it says account for almost 70% of the country's pay TV subscribers, is dominant and "has engaged in a strategy to stifle competition," particularly by using its dominance against the cable group.

Last year Sky also bought a 17.8% stake in ITV, which the cable group believes was a "blocking" tactic to prevent it from buying the network.