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The prospect of Sky Atlantic becoming available to Virgin Media’s 3.8 million TV subscribers has moved closer after it emerged that talks between the two companies have reopened. The channel had a high-profile launch in February 2011, but the UK’s two biggest pay-TV operators never really got close to agreeing a cable carriage deal at the time.
Sources have indicated that the operators have now reopened negotiations and, although a deal is not imminent, they are significantly closer to agreeing a price for Sky Atlantic than they were two years ago. One source said a “degree of realism” had entered the talks. Sky Atlantic launched with a number of flagship series from US premium broadcaster HBO, including Boardwalk Empire and The Sopranos, after BSkyB struck an output deal with the Time Warner-owned network.
It was designed as an exclusive home for premium content, including shows such as AMC’s Mad Men and Showtime’s House Of Lies, and was conceived as a way to attract and hold on to subscribers who were less interested in sport and movie content. Dramas The Following and Game Of Thrones now regularly deliver consolidated audiences of more than 1 million. The channel had a reach of around 11.1 million viewers in the first three months of 2013, according to Barb research, a year-on-year increase of 1.3 million. This puts it level with channels such as Fox and Discovery.
It is thought that Sky could be persuaded that an additional 4 million potential viewers for Sky Atlantic would be a positive move, boosting ratings for its content, which is often accused of rating poorly relative to its quality. Carriage negotiations for Sky’s other channels on Virgin Media are due to be renewed this month, at which time a deal for Sky Atlantic is likely to be discussed.
Virgin Media could also be looking to replace ESPN, which will close this summer, in its premium XL package. It will want to ensure it keeps churn low for its top bundle and has not yet struck a deal for BT’s forthcoming sport channels. A move for a high-profile channel such as Sky Atlantic could help it retain customers. The cable operator’s outgoing chief executive Neil Berkett has previously said that Sky had initially asked for an “unrealistic price for the product”.