The news
Satellite broadcaster BSkyB last night pulled all its 'basic' (non-sports and non-movie) TV channels away from cable operator Virgin Media (the former ntl:Telewest) after a high-stakes game of financial chicken that developed into a public slanging match hours before the midnight deadline for an agreement loomed.
Representatives of the each company - including Virgin figurehead Richard Branson - suddenly started popping up all over the place yesterday on news reports claiming, in effect, that the other outfit was acting unreasonably.
BSkyB, Virgin said, was asking too high a fee for the channels (three times more than the existing contract, as we recall, though today it's saying, "nearly double") and complaining that its rival was unwilling to enter independent arbitration.
Countering that, BSkyB said simply that Virgin was not prepared to pay a fair market price.
Whatever the rights and wrongs, Virgin Media's cable TV customers have lost a bunch of channels that they'd had access to before - it will be interesting to see if there are get-out clauses that prevent subscribers from cancelling because of the channel losses - and BSkyB has lost the still-substantial fee that Virgin Media had been paying, rather than receiving a significant increase.
As yet, only Virgin Media has issued a formal statement about what's happened and its press release - included in full on page two - looks to be further increasing the stakes.
The company is promising to use the money saved in fees to build upon a "series of major programming acquisitions over recent months, including a wide range of hit movies and shows, ranging from The Sopranos and Nip/Tuck to Lost and The OC".
In addition, Virgin says that the 2,700 hours of programming currently available through its video-on-demand service will be extended to over 6,000 hours by the end of this year.
What's also possible - as we speculated when detailing the new package deals unveiled at ntl:Telewest's renaming to Virgin Media - is that the cable outfit may try to keep some customers sweet by providing them with the popular UK TV Gold channel free or for a nominal fee.
Thoughts on this falling out between these deadly satellite and cable rivals? Share them with us in the HEXUS.lifestyle news forum.
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External.links
Sky - home pageSky - Sky Broadband internet service
Sky - Sky by broadband video downloads
Virgin Media - home page
Virgin Media - all cable-based bundles
Virgin Media - introductory prices for broadband-based services
