Quote:
Originally Posted by OLD BOY
On the one hand, you are saying VM are 'digging themselves deeper into a hole' and you criticise them for not doing a deal, and then you imply that they can't give in because they will be seen as an easy target by other operators. Sounds to me like a cake and eat it argument.
The point is, UKTV were charging too much for the content they were offering and it appears that they were not providing the amount of on demand content that they were contractually obliged to make available.
Virgin clearly believe that they are not getting value for money, and will not agree to UKTV's terms. UKTV will lose a lot of money as a result of this intransigence and therefore, sooner or later, they will reconsider their position.
The fact the a deal was done with ITV I think shows other operators that VM will not be pushed around, and that is a good thing. However, I think that VM need to rethink their position regarding content. If they continue only to take content from other providers, they put themselves in a more vulnerable position commercially.
Although you paint this picture of disaster with the UKTV channels being dropped, it is not. They survived the Sky channels going off air some years back, and frankly, that was a bigger deal because at that time, the attraction of having pay tv was that you got the Sky channels.
Clearly, those who watched UKTV channels for much of their TV time will be disappointed or outraged by having the channels removed, most will not be too concerned by this. Yes, there will be some cancellations, but let's not get ahead of ourselves by intimating that VM will take a big financial hit by this. They were paying a lot of money to carry UKTV channels.
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They have dug themselves into a hole and giving in to ITV was the least worse option, but this will have the effect of them now being viewed as an easy target to increase carriage costs.
The fact that ITV got nowhere after 18 months of negotiations and then, within 24 hours of giving VM an ultimatum after their platform had been weakened, VM agree a deal acceptable to them speaks for itself. Other channel operators will now be queuing up to inflate their carriage costs.
I have previously covered why the Sky basics issue was a whole different ball game on more than one occasion.