Quote:
Originally Posted by Broadbandings
How do Sky have a monopoly Maggy? They neither have all the Premiership football nor keep the content to themselves being required by law to sell it onwards. It's purely the pricing that's the sticky part.
---------- Post added at 14:16 ---------- Previous post was at 14:12 ----------
We know this because Sky are a PLC and as such required to produce accounts 4 times a year.
I'm not sure if you've read Ofcom's plans but they consist of the product becoming 'retail minus'. Whatever Sky charge their customers they have to charge VM / BT etc that price minus an Ofcom adjudicated sum. How exactly will this reduce Sky's overcharging of their customers? All it will do, to my mind, is improve the profits of VM and BT and actively encourage Sky to spend less on their production and content as the less they spend while keeping their prices the same the higher their profits will be.
Just to make a point Virgin Media actually have a better gross margin % than Sky do and a higher EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) relative to revenue.
I'm not sure how impoverished you or anyone else think Virgin Media are but that rather sweet Operating Cash Flow / OCF number that Virgin pop up with here and there does actually mean just that. VM make more money than Sky do but, like most cable companies, bury the earnings amidst various write-offs to improve the tax situation. Their debt hasn't been paying itself off at a rapid rate these past several months, indeed they feel good enough to go ask for another 2 billion GBP in bonds.
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The reports DO NOT show how much it costing them to run the channels, even if it is that high it is there own fault for determine to outbid everyone with 1 billion pound bids why should everyone else pay for there determination to control the market