Quote:
Originally Posted by Chris
Last time round, Sky wanted Virgin to pay a price that reflected Sky's investment in programming on Sky One (in essence they wanted Virgin to help them pay the king's ransom it cost to steal Lost off C4). This flew in the face of the conventional means by which these things are normally agreed (you pay for a channel based on its popularity, not based on what its owner has lavished on it).
Sky might just have got away with this tactic had they not only recently used the popularity argument to negotiate a vastly reduced rate for carriage of the channels VM owned at the time. VM was rightly able to point out that what's sauce for the goose is sauce for the gander.
Nevertheless, Sky threw its toys out the pram and spent a few weeks being faced with the reality of ratings sliced by a third and advertisers making dangerous noises about wanting lower rates for slots on Sky One before eventually cutting a deal that essentially valued Sky Basics and VM's channels on the same basis. All of which is now a bit academic as VM has sold the lot to Sky anyway.
As you say, Sky won't be as worried about advertising rates this time round because the channel has never been on VM, so nobody is going to complain that viewing figures are lower than they thought they would be. On the other hand, I would not be at all surprised if once again Sky's valuation of the channel in negotiations with VM has more to do with what Sky has spent on it rather than what it's actually worth in ratings terms.
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This reminds me of something that has always surprised me. Sky one is theoretically accessible to about half the households in the UK (approx 21m homes, 8m Sky subscribers and 3m VM subscribers). Yet when the big shows (particularly Lost and 24) transferred to Sky, they got viewing figures that were anywhere from 1/6th to 1/3rd of what they were when they were on terrestrial TV. Frankly, if I were in Sky's position, I'd be reviewing my strategy, not just adding another channel for people to not watch American shows on.