BSkyB set to pull channels from Virgin Media

hamba

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BSkyB set to pull channels from Virgin Media

BSkyB today looked set to pull its major channels from the Virgin Media cable network at the end of this month after talks collapsed between the two rivals, leaving relations between the groups at an all-time low.

The broadcasting giants failed to agree on a rate for the channels, which include Sky One, Two, Three, Sky News and Sky Sports News, although the talks do not affect the availability of Sky's premium movies and sports channels.

Virgin Media, rebranded from NTL earlier this month, claimed Sky tried to deliberately sabotage the negotiations by doubling the price of its channels.

Chief executive Steve Burch today said Sky's behaviour was "heavy handed and anti-competitive", adding "consumer choice has been reduced as a result".

The group, formed by NTL's takeover last year of Virgin Mobile and Telewest, said it hoped to continue negotiations, despite claiming Sky broadcast promotions last week suggesting the channels were about to disappear from the Virgin network.

The breakdown follows news earlier this month that Sky planned to withdraw channels from free-to-air digital terrestrial television platforms, such as Freeview - a move which is being closely looked at by the industry watchdog Ofcom.

Sky is set to broadcast the channels - Sky Three, Sky News and Sky Sports News - on a terrestrial pay-TV service, set for launch in the summer.

Ofcom said it was looking into whether or not Sky's plans would " unacceptably diminish the appeal" of Freeview.







By Holly Williams, PA
Published: 23 February 2007
© 2007 Independent News and Media Limited
 

hamba

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Sky denies breaking off talks

Sky denies breaking off talks

BSkyB has hit back at cable rival Virgin Media over the carriage deal row that threatens to remove hit shows such as Lost and 24 from cable homes.

Sky said it was "surprised and disappointed" Virgin had suggested "prematurely" that cable viewers would miss out on Sky's basic channels - Sky One, Two, Three, News and Sports News - from Thursday.

Sky denied Virgin's claim that it had broken off negotiations and that it was seeking to more than double the price Virgin is charged to carry its the channels.

The satellite company said several days remained before the deadline and that active discussions were continuing. The negotiations do not affect Sky's premium channels offering sports and movies.

"We want Sky basic channels, including Sky One, Sky Two, Sky Sports News and the award-winning Sky News, to remain available to NTL/Virgin customers," Sky said in a statement that drew attention to Virgin's previous incarnation as NTL.

"We're also offering more to NTL/Virgin than ever before, including HD services and new channels such as Sky Three and Sky Arts, the UK's only dedicated arts channel.

"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." Sky said its goal was "a reasonable price that reflects the benefits that we bring to NTL/Virgin customers".

"Our last offer remains on the table. Sky has negotiated with NTL/Virgin in good faith and has shown flexibility on price. We categorically reject their claims that we have broken off negotiations or that we are seeking to more than double the price of these channels."

Sky said its shows, which include the first airing of acquired US hits such as Lost, 24 and the Simpsons alongside original productions such as Terry Pratchett's Hogfather, were some of the most popular on cable. It said all of cable TV's top 25 rated pay-TV entertainment shows this year had been on Sky One.

Sky added that it offered better value for money than Virgin. "NTL/Virgin is spending tens of millions of pounds on re-branding, including paying millions to the Virgin Group simply to use their name," Sky said.

"At the same time, they have increased prices for their TV customers by up to a third in the last year and are charging high prices for broadband.

"We think NTL/Virgin should sort out their priorities and avoid short-changing customers with an inferior and over-priced service. "Sky has always stood for choice and competition. This is something we are very proud of. Since the launch of Sky Broadband, Sky has injected a new level of competition and value into the marketplace. Customers switching from NTL/Virgin to Sky are saving hundreds of pounds a year. "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."








Chris Tryhorn
Friday February 23, 2007
MediaGuardian.co.uk
© Guardian News and Media Limited 2007
 

pinkhelmets

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"We think NTL/Virgin should sort out their priorities and avoid short-changing customers with an inferior and over-priced service. "Sky has always stood for choice and competition. This is something we are very proud of.....
:Laugh: PMSL .....that bit needs to be copied into the Fun and Laughter room! :roflmao:
 

pinkhelmets

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Branson's letter in full:

Sky's the limit
Dear customer,

Let's face it. Things would be pretty boring if choice didn't exist. There'd be just one kind of airline to fly with. One type of car to drive. And if Sky had their way, there'd only be one place to get TV.

We thought we'd let you in on a few tricks they've been trying to get their way.

- While we've continued to make Virgin Media channels like Living, Bravo and Challenge available to all Sky customers, Sky may withdraw their non-premium channels from Virgin Media's service – in order to force you into switching service.
- Virgin Media were willing to pay an increase in costs in order to get the complete range of Sky content and channels.
- However, Sky has consistently made demands that bear no relation to their channels' market value.
- We have refused to accept these demands, since it would mean absorbing significant costs ourselves, and passing price increases to our customers that are simply unfair. We are not prepared to rip off our customers.

So Sky have picked up their ball and gone home.

As a Virgin company, we're well used to the attempts of large corporations trying to manipulate markets, stifle competition and rip off consumers.

Luckily, we don't think Sky's the limit.

We think the future's full of fresh entertainment and communication possibilities. And we're looking forward to bringing them to you. With all the freedom and choice you deserve.

We've launched Virgin Central, a revolutionary type of TV channel, where programmes start and stop when you say so. This is only available on Virgin Media, since Sky don't have the technology to be able to transmit it. What's more, it's available to every single one of our digital TV customers.

And there's our unique on demand library. A giant collection of over 500 films, 1000 music videos, 100s of TV shows – all at your beck and call. You can access them at any time.

We're not scared of competition, we welcome it.

Yours,
Richard Branson
 

pinkhelmets

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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.

Burch's statement in full:

"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."
 

T4i

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ROFL!

Great read!

I'd love to be a fly on the wall when these 'talks' go on.
 

sargie

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that will suck if they pull those channels. seems daft when sky are making money from virgin media off of those channels. makes you think though sky must be bobbing them selves over the takeover by branson.
 

pinkhelmets

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....makes you think though sky must be bobbing them selves over the takeover by branson.
Exactly it m8. Thats why sky quickly bought into ITV to stop Virgin buying them, which kicked off loads of issues that are ongoing, including MP's making a stand. Sky are seriously worried that Virgin are becoming a serious rival. I hope Virgin get behind freesat and work with the bbc to start a rival satellite service, plus this will mean they will have lots of spare cash to create their own channel, which may be become better than sky1 or at least become a good rival to it. Sky are worried, no doubt and its about time they had competition so I hope talks do fail.
 

digidude

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"Sky has always stood for choice and competition. This is something we are very proud of.


ahahahahahahahahahaha


hehehehehehehehehehehehe


breath hahahahahahahahahahahah


feck lmfao

aaaaaaaahhhhhhhhahahahahahaaHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA




did sky say that? fook me i need to sit down


next theyll be saying theyre the best thing thats ever happened to UK pubs

feck i need a beer now lmao
 

audiobookman

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This has been really entertaining, actually more entertaining than any sky channel, yeah that got me to, they stood for competion.
SO i take it sky arnt flavor of the month lol, they wouldnt know the truth if it hit them on the face on a virgin banner saying truth. Sky have to realise that people are not as stupid as they used to be, we can all access the net now and see the lies they dish out on a regular basis. MOVE OVER SKY TIME FOR SOMEONE TO DO A PROPER JOB. ADIOS
 

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Sky denies breaking off talks

Think branson must have them running scared LOL!
 

pinkhelmets

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Burch continues......

Steve Burch, Virgin Media's CEO said: "The latest offer from Sky is nothing more than smoke and mirrors. They continue to demand a price for their basic channels that demonstrates a determination to use their market power to bully competitors and enforce pricing that bears no resemblance to commercial reality".

In this morning's edition of the Daily Telegraph BSkyB claims to have offered Virgin Media significant concessions and a new annual price of 90 pence per subscriber, or GBP32.4 million, for carriage of its basic channels on Virgin Media's network. They maintain that this represents an increase of 19 per cent on the existing arrangement.

Sky is blatantly misrepresenting their offer, which specifically provides for a minimum guaranteed annual payment that is twice the current annual payment. Under Sky's proposals, there are no circumstances under which Virgin Media would pay anything less than this doubled amount. The pence per subscriber figure they quote is simply not applicable because of the minimum guarantee.

Sky wishes to double the cost of the existing arrangement for a portfolio of channels whose popularity has declined by 7 per cent every year for the past three years. Moreover, Sky has demanded that Virgin Media remove their basic channels from our entry level TV package (which is available for free with any other Virgin Media product). This means that, even were terms agreed, Virgin Media would be forced to deprive a significant proportion of their subscribers of Sky's basic channels. This is nothing short of an attempt to stop Virgin Media giving consumers a better deal so that Sky can maintain their monopolistic position in the market.

We find this selective use of facts disingenuous and misleading, but hardly surprising. It confirms our view that Sky have no intention of agreeing a deal on sensible commercial rates and that a withdrawal of these channels is an outcome which they are deliberately trying to engineer in order to suppress competition.

In justifying their demands, Sky has emphasized their additional investment in their basic channels. In reality their investments have failed and over the last 5 years they are the worst performing general entertainment pay TV provider on our network. Like any good monopolist, Sky apparently wants to be rewarded for failure.

Part of the background to this dispute is the significant investment in new and exciting programming by Virgin Media over recent months. Virgin Media has offered Sky a generous increase on the existing fee arrangement, in return expecting only to receive the same product that Sky makes available to its own customers. We remain open to any genuine offer at any point up to expiry of the existing contract.


Note.
The dispute concerns the carriage of Sky's basic channels: their sport and movies channels are unaffected and will continue to be available to Virgin Media's customers.
 
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audiobookman

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looks like the gloves have finally come off, go on vm kick sly into touch!, its about time their monoply was broken.
 

sakiblateef

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Sky and Virgin remained defiant today as the dispute over the carriage of the former's channels on cable rumbled on.

In an interview with The Telegraph today, Sky chief financial officer Jeremy Darroch said that the company had agreed to cut its monthly carriage fees from 95p a subscriber to 90p. With Virgin Media's subscriber base at around 3 million homes, such a deal equates to £32.4 million a year.

The current deal expires at midnight tomorrow (Wednesday) night. If new terms are not agreed before then, Virgin customers will lose access to channels including Sky One, Sky Two and Sky News.

Sky's asking price of 90p includes an estimated 16.2p for Sky News, Sky Sports News and Sky Three, the three Sky stations available on Freeview but that will be removed from the DTT platform this summer.

With this portion of the cost removed - Virgin will only be required to pay for these channels when they are removed from Freeview - Sky says that the new deal is an increase of just 20% on the existing one.

"The interests of customers should come first," said Darroch. "We have proposed a 20% increase in cost for channels where we have increased investment by two thirds."

Virgin claimed that Sky was "blatantly misrepresenting" its offer, arguing that the deal included a minimum guaranteed annual payment that is twice the current amount. "The 90p per subscriber figure they quote is simply not applicable because of the minimum guarantee," said Virgin in a statement.

While Virgin acknowledged that Sky had invested more in its channels, it pointed out that ratings for the portfolio had declined by an average of 7% every year for the last three years. "Like any good monopolist, Sky apparently wants to be rewarded for failure," Virgin added.

Meanwhile, Sky has now suggested that it would like direct access to the Virgin Media network in order to sell its channels direct to Virgin customers. "Should Virgin Media ultimately turn down this offer," said Darroch, "then we are prepared to continue to offer our channels on cable at no cost to Virgin Media by obtaining direct access to its cable network."



Some how I don't see Virgin allowing Sky Access its cable network whenever they want.
 

biffo1

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ive heard the same me mate has told me , im not arsed as i dont watch them
 

pinkhelmets

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In Full: Latest Sky statement on Virgin dispute

BSkyB issued the following statement late Tuesday as its high profile carriage dispute with Virgin Media rumbled on.

Following another statement issued today by Virgin Media, Sky believes that Virgin Media should set aside its rhetoric and return calmly to the negotiating table to reach an agreement for the benefit of its customers. Further displays of acrimony are not a route to a speedy resolution that will ensure that Sky's basic channels remain available to Virgin Media's customers from 1 March 2007.

In light of Virgin Media statements and in the interests of an accurate record, Sky is making a series of clarifications to highlight its willingness to keep its basic channels on air for cable TV customers. Sky has consistently reached out to Virgin Media to put forward solutions to the current situation. In contrast, Virgin Media has made no revised proposal to Sky since 22 February.

Most recently, Sky contacted Virgin Media on Monday 26 February with a revised and improved offer. As well as safeguarding access to Sky One, Sky Two, Sky News, Sky Sports News and Sky Travel, the proposed agreement would bring new services to Virgin Media customers, including Sky Three and Sky Arts. Under the terms of the new offer, the cost to Virgin Media of offering Sky's basic channels would be around 3 pence per day for each of its TV customers. For comparison, on a daily basis this is the amount that a Virgin Media mobile phone customer pays to send a single SMS text message to another customer on the Virgin Media network.

Sky refutes Virgin Media's statement that its revised offer "specifically provides for a minimum guaranteed annual payment that is twice the current annual payment". Importantly, the minimum guarantees of future revenue which form part of Sky's offer take into account estimates of future subscriber growth provided by Virgin Media during negotiations. Moreover, Sky is offering Virgin Media substantially more value in the new deal than in the one set to expire, including the option for Virgin Media to carry high definition (HD) and video on demand (VOD) services for these channels.

If Virgin Media believes that Sky's basic channels are not worth around 3 pence per day to its customers, Sky has made an alternative proposal that would ensure that Virgin's customers would nevertheless continue to enjoy access to the shows they love. At no cost to Virgin Media, Sky would retail its basic channels directly to cable customers on the Virgin Media network. This initiative would operate in a similar way to the means by which third-party broadcasters enjoy open access to Sky's digital satellite platform. Sky believes that a decision by Virgin Media to provide access to its platform would indicate a willingness to compete and to provide choice to customers. At present, the only means for third-party broadcasters to reach customers on Virgin Media's network is through a wholesale channel supply agreement with Virgin Media.

Virgin Media has made negative comments about the value of Sky's basic channel portfolio, describing Sky's programming investments as a "failure". Yet at the same time, Virgin Media is claiming paradoxically that Sky has a "monopolistic position in the market" and is using "market power to bully competitors". Industry figures show that Sky's basic channels were watched for at least two hours per week on average in 2006 by over a million people in cable TV homes (source: BARB). The popularity of Sky's basic channels has continued this year. All of cable TV's top 25 rated pay-TV entertainment shows this year have been on Sky One (source: BARB).

Late last night, Virgin Media rejected Sky's new proposals without making a revised offer of its own. This morning, Virgin Media chose again to go on national radio to criticise Sky.

Commenting on the negotiations, a Sky spokesperson said: 'The emotive tone and intensity of Virgin Media's communications do the company no credit. Virgin's management appears to have a greater interest in denigrating Sky through a PR offensive than in delivering real benefits to customers. Sky has made a new offer to Virgin Media because we don't want cable TV customers to lose the programmes they enjoy. For around 3p per customer per day, or the cost of a single text message, Virgin could make sure that its customers enjoy more Sky channels than ever before. Our offer remains on the table and we're available for talks with Virgin Media at any time.'"
 

pinkhelmets

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Now to clarify, in basic :).

Virgin have said "stick the channels" and are no longer interested, they just arent worth it.
Sky came back with the reduced offer on Monday, which in reality reportedly meant a 30% overall increase (who knows truth at this point). Virgin still say "stick it, we're not listening".
Sky argue that its now a very cheap deal, while Virgin are saying that the conditions are that a guaranteed minimum is set, so sky's 'per head' figures are irrevelvant and the offer isnt as good as they say ~3pence per day etc.

Analyst estimation is that maybe Virgin would lose maybe 3% of subscribers, while Sky would lose huge revenue.
Yesterday (Tuesday) Sky also have began mentioning they would maybe be prepared to provide the channels on cable 'at their cost' aka 'free', but would have control of cable broadcasting, ie they would advertise sky products and services and not cable, and would have access to virgin customer base.
No official statement on that yet, but it is believed unlikely that Virgin will ever allow that position.

The arguement continued this morning live on bbc television.
Virgin suggested to take the dispute to independent arbitration for resolution. Sky actively refused the offer.
Sky asked Virgin if they would be reducing subscription for its cutomers, due to the loss of the channels. Virgin replied they would not be, they would be providing more VoD content.

Today is the last day, so something will happen.
 
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McMav

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The channels will go. Mod VoD great. I bet you have to pay for it though unless you take top tier tv package.
 

digidude

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from midnight tonight i think it is

this is when sly will realise that they are not the biggest tv force in the country any more, i hope virgin DO drop the channels as then sky will start to worry more than they are now. in the future sky will have to renew its contract to carry all the cable owned channels, and i hope the contract aint renewed, its about time someone took sky on
 
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