Only 100 Customers/Day Leaving VM

Originally Posted by Gareth

I presume you mean unfair as in unlawful? If so, how is this unlawful?

Notwithstanding the fact that none of us are privvy to the terms of any contract between VM and BSkyB, I don't see how one company bargaining with another is unlawful. It may be unfair, as in unjust, for VM considering the price paid in relation to the value of the product, but I don't see why you consider it unlawful.

I'm not trying to be funny here... I'm a neutral by-stander as I am a customer of both companies. I have no interest in either of them "losing out" as I will stand to lose on both counts. They're both going to recoup any incurred losses from their customers, so it'll be a double-whammy for me.

Gareth, I think this was in response to arcam's earlier posts about the VM t&c's being unfair and customers being able to end the contract because of that, not about being "unlawful".

[SMHarman]

Originally Posted by VirginMediaSucks

Despite this, Virgin Media's share price is holding up fairly well (see http://finance.google.com/finance?q=VMED). However, they are listed in New York and I do wonder just how well their investors know the UK market.

Nowdays cable in the UK and the US are fundamentally no different. The big issue originally was the cost to cable as cable was burried, rather than strung from poles (a la BT) which everyone in the US bidding on the UK networks appeared to miss.

---------- Post added at 11:30 ---------- Previous post was at 11:28 ----------

Originally Posted by VirginMediaSucks

In Q4 2006, VM made just £9.2m on revenues of £1018.6m (source http://library.corporate-ir.net/libr...ssRelease.pdf). That's a profit margin of 0.9% which is extremely poor. Virgin will save just £30m annually on the loss of Sky basics, but you can see how fragile their bottom line is.

So Sky were asking for 400% of bottom line profits, and that is after also reducing top line revenue by 10m or so with the reduction in the amount they pay for carriage of VM channels. A potential transfer of about 30m from VMs bottom line to Skys

[AndyCambs]

Originally Posted by SMHarman

So Sky were asking for 400% of bottom line profits, and that is after also reducing top line revenue by 10m or so with the reduction in the amount they pay for carriage of VM channels. A potential transfer of about 30m from VMs bottom line to Skys

Well spotted!

[Carl J]

Worth mentioning that that isn't a bottom line figure it's operating profits. Take out the interest payments on that just shy of £6 billion debt and VM's cash bundle actually dropped, £80 million or so IIRC.

Well spotted perhaps but it's not Sky's problem if VM struggle to make a profit. From Sky's POV VM's earlier companies were quite able to pay them inspite of losing money hand over fist so it's a tad irrelevant.

'Transfer' from VMs bottom line as you call it I'd call a company paying a supplier but *shrug* at the end of the day this is nothing more than one company disagreeing a price with a supplier, nothing more arcane about it.

VM could have retained the channels on their network but that would have meant opening up their network to another retail provider for those channels which does blow the financials argument out of the water to an extent, though whether VM customers would have tolerated something similar to the Homechoice / Tiscali TV 'Sky by wire' package is highly questionable

[SMHarman]

Originally Posted by zinglebarb

But by giving those discounts they are still getting an income . IMO better to have a customer paying something than a customer leaving and paying nothing its math.

True it costs a lot more to get a new customer on board than it does to retain an existing customer.

[savvychels]

Originally Posted by welwynrose

I was a on/off Sky One viewer but as I am happy with every other aspect of VM I have not even contemplated going to Sky or ringing customer services for a discount - my in-laws didn't even realise Sky had disappeared from their programme list until they were channel hoping the other night - so again haven't thought of cancelling or ringing for a discount - there most be loads of other people like us so I can see that not as many people are leaving VM as were possibly anticipated

Count me in those 'loads of others like you'. Happy enough with overall service - not cancelling - not whinging for a discount to 'keep my custom'.

[SMHarman]

Originally Posted by Virgin Mary

I can be OTT sometimes

The solution to the Sky One problem was simple:

Put the "hor air" Branson on every TV program (including Richard and Judy) to say that Murdoch wants to squeeze an extra 50p per customer per month for his SKY One.

And then let the VM customers decide:

Keep Sky one and pay 50p extra, or get rid of Sky one and pay 50 less.

Simple and Clean. Now, VM has created so many unhappy customers for no reason. Old stupid NTL, it will never change.

You are forgetting the 40m minimum payment that the contract stipulates.

---------- Post added at 12:45 ---------- Previous post was at 12:37 ----------

Originally Posted by Stuart C

Virgin could get into satellite relatively easily anyway. Sky don't own the satellite, they just rent transponders on it. Anyone (with enough cash and an uplink facility) can approach SES (who do own Astra).

But to get on the Sky channel lineup on the box is another matter.

---------- Post added at 12:49 ---------- Previous post was at 12:45 ----------

Originally Posted by GuestUK

To me, there seems to be something odd in the way the flextech and sky deals were done. From an interesting interview in the guadian with Murdoch

Edit: Also of interest - seems Sky offered Virgin the ability to retail their channels themselves with full control and profits, although Virgin turned it down

It seems odd that they would put themselves in such a position, as well as taking the cuts that they did, unless there was something happening in the bigger picture - or perhaps I'm reading too much into it.

It is all positioning, neither would want to be back in the position where you paid an extra fee a month for their channels, with TV channels it is all about picking up the pennies from the bundle.
3m pennies adds up to a lot more than,
well looking at the math VM have 3.5 m customers paying blah blah making sky want 40m
Now realistically only about 85% of them apparently watch Sky 1 and Sky SN. So to recoup 40m from them would mean they need to pay
3.5m * 15% = 525,000 customers
40m/525,000 = 77 per subscription per year or 6 a month. How many of that 525k would pay 6 a month for Sky One and SSN and consider it Value for Money?

[chrisparr]

Wow, that was hard work reading this thread.

People rant on about sky one but the only one I miss is sky news. I'll just have to get used to BBC news 24.

Loosing sky one isn't the end of the world for me. I was getting sick to the back teeth of the Simpsons (force fed re-run time, after time, after time), and I can catch up with Lost, 24 et. al. on lovefilm.com. It's easier that way as I don't have to commit to being in front of my TV at a set time every week (I don't mind waiting until DVD release).

I welcome this move and if Virgin Media are smart (and can commit the cash), they will try to compete on real terms - launch their own news channel, jump in and bid for the high profile content etc... There are other top quality shows out there; The Outfit for drama, Scrubs for comedy. I'm sure some people hate them, but I'm happy.

If some people are as miffed as their posting here would suggest, I really don't know why they remain VM customers. Vote with your feet rather than moaning about it. There is more to life than sky one, and if you don't agree then go switch and get your life back. Power to the people and all!

Anyway, that's all I have to say.

Have a nice evening

Chris

Originally Posted by chrisparr

Wow, that was hard work reading this thread.

People rant on about sky one but the only one I miss is sky news. I'll just have to get used to BBC news 24.

Loosing sky one isn't the end of the world for me. I was getting sick to the back teeth of the Simpsons (force fed re-run time, after time, after time), and I can catch up with Lost, 24 et. al. on lovefilm.com. It's easier that way as I don't have to commit to being in front of my TV at a set time every week (I don't mind waiting until DVD release).

I welcome this move and if Virgin Media are smart (and can commit the cash), they will try to compete on real terms - launch their own news channel, jump in and bid for the high profile content etc... There are other top quality shows out there; The Outfit for drama, Scrubs for comedy. I'm sure some people hate them, but I'm happy.

If some people are as miffed as their posting here would suggest, I really don't know why they remain VM customers. Vote with your feet rather than moaning about it. There is more to life than sky one, and if you don't agree then go switch and get your life back. Power to the people and all!

Anyway, that's all I have to say.

Have a nice evening

Chris

Excellent Post. Nice to see someone with such a common sense approach, as opposed to some on here who only seem to be driven by an unhealthy obsession with Richard Branson.

[SMHarman]

Originally Posted by chrisparr

I welcome this move and if Virgin Media are smart (and can commit the cash), they will try to compete on real terms - launch their own news channel, jump in and bid for the high profile content etc... There are other top quality shows out there; The Outfit for drama, Scrubs for comedy. I'm sure some people hate them, but I'm happy.

Chris

I would be suprised if the launched their own news channel. After all, if ITN could not sustain a 3rd competitor to BBC and Sky News 24s there is a good sign that there is really only space for two 24 hr news channels.

Originally Posted by ahardie

Excellent Post. Nice to see someone with such a common sense approach, as opposed to some on here who only seem to be driven by an unhealthy obsession with Richard Branson.

Or with......Rupert Murdoch.....shudder!

[etccarmageddon]

Originally Posted by Carl J

... at the end of the day this is nothing more than one company disagreeing a price with a supplier, nothing more arcane about it...

there is more to it though

- firstly the issue that SKY is a platform supplier as well as a channel provider therefore a conflict of interest - they can over price their channels in order to gain exclusive broadcasting.

- secondly (as you mentioned) SKY having an open platform where channels can broadcast as pay to view independently of the SKY packages whereas VM are a closed platform - therefore a non level playing field.

[Bob]

What I would like to know is, with Sky saying their channels are worth more now because of all the investment, were they going to passing on the same increase to their own customers and not just those on Virgin Media?

[AndyCambs]

Originally Posted by Bob

What I would like to know is, with Sky saying their channels are worth more now because of all the investment, were they going to passing on the same increase to their own customers and not just those on Virgin Media?

That's the $64k question - and my guess is that it is bound to happen having snared some unsuspecting new users with promises of low prices..

[Gareth]

I was under the impression that Sky increased the costs because they increased the content of the package they were selling - it's not just that they were asking for more money for the same channels, but they added some HD channels, Sky Arts, etc... As their own customers already had access to these channels as part of their package with Sky, there's no need to increase the price.