Virgin threatens legal action

hamba

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Virgin threatens legal action

Cable group Virgin Media has threatened to take its dispute with pay-TV rival BSkyB to the high court if the warring companies fail to strike a deal over the next month.

Virgin, which has 3.3 million cable TV customers, claims Sky, with 8.4 million subscribers to its satellite service, is guilty of "abuse of dominance" for pulling its basic channels such as Sky One its cable network.

The cable operator said it would take the dispute over distributing Sky's channels to the high court if it is not settled within 30 days.

"Following Sky's withdrawal of its basic channels from Virgin Media's TV service, Virgin Media has formally advised Sky that it will pursue action in the high court if their carriage disputes are not resolved within 30 days," Virgin Media said in a statement.

"This comes on the heels of Sky's rejection of an offer by Virgin Media to have the matter resolved through legally binding arbitration by an independent expert."

Virgin said it would seek damages if the dispute is not resolved, adding that it wanted to pay a "reasonable commercial rate" for Sky's channels.

Virgin Media is also seeking to renegotiate the deal to have its own channels, including Living TV, distributed on Sky's digital satellite service.

Sky forced down the price it paid to carry Virgin Media Television's channels in negotiations concluded earlier this year.

"We are not interested in prolonging this dispute any longer than necessary but we will not allow Virgin Media or our customers to be the victim of Sky's market power," said Steve Burch, the Virgin chief executive. "In the interest of the consumer, we want these issues resolved quickly."

Virgin claims that, under Sky's current proposal, it would be paying 17 times more per subscriber for Sky's channels than the satellite company would pay for the Virgin channels.

"This gaping disparity in channel valuation is the hallmark of Sky's systematic abuse of dominance and their longer-term objective of suppressing existing and emerging competition from other companies," Virgin said.

"Throughout both sets of negotiations, Virgin Media have proposed relatively small adjustments to the status quo (mostly in Sky's favour). Sky, by contrast, have consistently tried to use their market power to fundamentally change in their favour the dynamics of the pay-TV market."

Cable viewers lost access to the Sky channels and to shows such as 24 and Lost last week when the companies failed to agree a price for showing the TV services on Virgin.

Virgin has accused Sky of demanding double the price of its channels to around £48.5m a year in the deadlocked distribution talks.

More than 5,600 Virgin Media customers have now posted comments on the company's website, many of them critical of the loss of Sky channels.

The dispute does not involve Sky's premium sports and movie channels.








Chris Tryhorn
Monday March 5, 2007
MediaGuardian.co.uk
© Guardian News and Media Limited 2007
 

pinkhelmets

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VirginMedia full statement regarding legal action plans-

------------------------------------------------
Following Sky's withdrawal of its basic channels from Virgin Media's TV service, Virgin Media has formally advised Sky that it will pursue action in the high court if their carriage disputes are not resolved within 30 days. This comes on the heels of Sky's rejection of an offer by Virgin Media to have the matter resolved through legally binding arbitration by an independent expert.

Virgin Media is challenging the pay TV giant for its abuse of dominance.

The remedies sought will include supply of Sky's basic channels at a reasonable commercial rate, as well as fair payment for Sky's carriage of Virgin Media TV channels, such as Living and Bravo. Virgin Media will also seek damages if the dispute is not resolved.
------------------------------------------------------

Commenting on Virgin Media's position, CEO Steve Burch said:
We are not interested in prolonging this dispute any longer than necessary but we will not allow Virgin Media or our customers to be the victim of Sky's market power. In the interest of the consumer, we want these issues resolved quickly.

Virgin Media has chosen to publicise its actions today because, given ongoing media coverage of this issue, consumers have a right to understand more about the facts behind the headlines and what Virgin Media is doing to put things right. The numbers behind Sky's pricing proposals speak for themselves and reveal the extreme nature of their behaviour.

Historically, Sky and Virgin Media have each retailed the other's channels to their customers: Virgin Media TV channels, such as Living and Bravo, have been retailed by Sky to its customers; and Sky's basics channels have been retailed by Virgin Media to its customers.

In the past few months, Sky has demanded nearly double the price for its basic channels (whose popularity is declining), while forcing a dramatic cut in the price it pays for Virgin Media TV's channels (whose popularity is increasing). More specifically:

- In Virgin Media homes, the viewing share of Sky's basic channels has fallen by about 20 percent over the last three years. Despite this, Sky has demanded that Virgin Media pay nearly double the existing arrangement for retailing the channels. Sky has sought to increase the fees to about GBP48.5 million per year (including some GBP8 million for some ancillary services)

- In January, despite a 15 per cent increase in the viewing share of Virgin Media TV's channels over the last three years in Sky homes, Sky forced Virgin Media to accept an 85 per cent reduction in the price it pays for the channels

- Even when adjusted for the Sky basic channels' marginally higher share of total viewership and its larger subscriber base, Sky is demanding an annual price per subscriber some 1700 percent higher than it pays for the Virgin Media TV channels

This gaping disparity in channel valuation is the hallmark of Sky's systematic abuse of dominance and their longer term objective of suppressing existing and emerging competition from other companies. Throughout both sets of negotiations, Virgin Media have proposed relatively small adjustments to the status quo (mostly in Sky's favour). Sky, by contrast, have consistently tried to use their market power to fundamentally change in their favour the dynamics of the pay TV market.
 

michael1

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good on them .but as they say money rules the world and that is what it is about .:Boo:
 

pinkhelmets

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A reply statement from Sky:

Sky notes Virgin Media’s statement.

These accusations are without foundation. Sky will defend itself vigorously should Virgin Media decide to extend its PR campaign to the courts.

We’re as disappointed as Virgin Media’s customers that the channels they enjoy are no longer available to them. Our latest offer of just 3p per Virgin Media customer per day for an even bigger and more valuable package of basic channels is very fair, and it remains on the table.

In contrast, Virgin Media’s Chief Executive has said publicly that he is not inclined to want to restore our basic channels to the Virgin Media platform and may not even be willing pay the price that his company had previously offered.

This makes it even more disappointing that Virgin Media still refuses to allow Sky to take the financial risk of making our basic channels available directly to customers on the Virgin Media network. Far from being “forced” to accept terms offered by Sky, Virgin Media had just such an opportunity in relation to the distribution of its own channels on the satellite platform and chose not to pursue it.

Virgin Media is not a victim and its attempt to portray its actions as being in the interests of consumers ring hollow. We urge Virgin Media to set aside its threats and posturing and engage genuinely in a sensible negotiation to restore Sky’s basic channels to its customers.
 

pinkhelmets

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£9.9 million a day!!!
lol

.....its 99,000 per day :).

Anyway virgin dispute that because there is a clause that there is a minimum yearly figure so its not on a 'per-customer' basis.

Rough figures that are reported are-

Sky want 40,000,000 per year for their basic pack. This is believed a drastically reduced amount from the original asking price.

Sky pay 9,000,000 per year for Virgin channels.

Virgin used to get 36,000,000 for its channels (more channels than the sky basic pack) but sky refused to pay and Virgin ended up backing down and accepting 9million as they could not afford the reported ~100million loss of advertising revenue.

Virgins channels have gained popularity, Sky's have lost popularity. Sky can afford a 60million loss of advertising revenue.
 

sargie

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i hope virgin win becasue today on my msn hotmail there is an ad saying 8mb broadband at a fraction of the price of ntl. sky are stooping very low and i would not swich to them for sky one and so on out of principal.
 

nizzex

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F--- murdock and Sky. :ASSFLASH:
 

Spod

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Good on Virgin Media standing up to Sky. It is about time other media companies took a stand against the megacorp that Sky has become.

Sky should not be allow to bully others into paying such ridiculous amounts of money to provide their channels for us the viewing public to see.
 

mercuryman

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Got to agree. Sky have had it far to easy for too long.
Virgin needs to show them that theres a new kid on the block that they wont be bullied.

Lets all hope the courts find in favour of virgin.

Its about time sky were brought down a peg or two!!!!!
 

Purity

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I saw an advert in the paper today saying "Don't Lose Lost" join Sky!

I think that is a disgrace and just shows to me that Sky talks a lot of crap about trying to resolve this problem.

Personally I think Branson is an ethical business man. If he makes a mistake, he admits it. So that's why I don't believe anything that Sky have said in the media. They want a monopoly.
 

xxbobcatxx

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yea it is about time that virgin do something and if is goning to high courts so be it and i say that if they pull there channels from sky ie Living that more people would come to virgin for living than go to sky for sky one
 

scott

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Maybe since virgin haved saved some money not paying sky for sky news and sky one they can bring the price of there broadband and telephone services down about.

Way more expensive than other providers.
 

cracker666

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We switched from SKY to Virgin, and the operator said "you know you wont get Sky one ,sky news etc, so no lost etc".
I said dont watch erm any way. "as i download them".
he sounded gutted and suprised when i said I was switching to virgin

so well done Virgin
 
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