Quote:
Originally Posted by GuestUK
I have no idea what the exact amount to may was, so I can't comment on that directly, but I am sure that some reasonable deal between the two could have been met with a little negotiation, but Virgin left the negotiations and began its PR campaign instead.
There would always be another couple of possibilities too. Make the sky channels premium channels (eg. like the Disney channel used to be, for example, £5 a month, or like Sky One used to be, £1 a month). That way, those that want Sky could pay, those that didn't wouldn't need to.
There's also the offer Sky gave, which was to handle the feed directly and market it to customers, and deal with the costs themselves, thus relieving Virgin of having to handle the costs.
I get the impression that with a little negotiating from both sides, the entire situation could have been resolved. It might be the wrong view, but from following the developments as they happened, it seemed like Sky was working hard to adapt their offer, throw in new channels, and striving to reach a deal, wheras Virgin gave their deal, walked away, and refused to negotiate - take their deal or nothing. Of course, this could be easily mistaken and there's much in the background we just don't know. I personally wonder if Virgin hoped that if they gave the flextech channels to Sky for cheaper, Sky would do the same to them, thus enabling them to cut costs and tout how their service was better and try to get more people to switch to cable - only it backfired, and they ended up losing money on the flextech channels to Sky, and getting nothing back, and now they're trying to find a way out.
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The cost was just shy of £40million extra sky wanted for VM to carry those channels. As for your quote about sky offering to carry the feed themselves, I don't know where you get that from, but it's total rubbish.
The bottom line to this is that sky wanted, no needed the extra money to keep that channel cost effective. They are making a huge loss on it themselves and saw VM as an easy target. Don't forget, Sky started the PR exercise first, telling VM customers to ring the call centre and tell the people that they wanted VM to keep sky one.
If you look at the costs sky have with sky one you then start to better understand the whole situation. With Nip/Tuck, Bones, Stargate, 24, Lost for them to purchase that lot by season you are looking at many millions of pounds (tens of millions in fact). That was and is sky's main reason for wanting to hike up the prices. 3p per customer per day does not sound much until you work it all out and it comes to near the £40 mil I said earlier.
I know it's an inconvenience to some people, but what do you want? do you want strong competition or do you want VM to say "Yes Mr Murdoch, how much more do you want us to give you today"?