SKY VS Virgin Media

[andygrif]

You should ask if Sky is the only one playing dirty tricks.

[Stuart]

I personally don't know if either company is playing dirty tricks.

I suspect Sky is though, mainly because I find it a little conveniant that it happened at the same time as Sky apparently tried to pull their channels from Freeview, and replace them with PayTV channels, and also apparently offered to broadcast to cable subscribers directly, thus cutting Virgin pretty much out of the picture. In both cases, more profit for Sky,

Also, had this (or even if it has) gone Sky's way and a lot of people left Cable to go to Sky, then Sky makes more profit.

In terms of Money, the best that Virgin can hope for is to maintain the Status Quo. At worst, they could (and still can) lose a lot of money.

On the other hand, if Ofcom do actually start imposing restrictions, then who knows what will happen.

[GuestUK]

Well, if it comes to dirty tricks, then timing is generally everything, and while I can see some dirty tricks from Sky's side, there definitely seems something slightly fishy on Virgin Media' side too.

The Flextech deal was originally set to expire at the same time as the Sky deal, so the two could have been resolved together, perhaps helping to ensure both sides played fair as they both had something to gain, and the deals could be done side by side. Instead, Virgin strangely decided to put the Sky deal off 3 months, and then did a significantly reduced deal for the flextech channels. Seems a bit of a dangerous thing to do. Were they hoping Sky would do the same back as some sort of gentlemans agreement (so they could carry on with their Sky on Virgin is cheaper than Sky on Sky advertisement, or offer their packages cheaper than Sky).

3 months later, the Virgin Media brand is starting to become more established, video on demand is more ready, V+ is gaining ground, the Virgin channels are doing well. The Sky carriage deal falls through. Virgin plays the victim to gain consumer support against "the bully", making Sky look bad, and then encourages people to use its video on demand (something it has over Sky) as a replacement to the sky channels, they even reduce the price to encourage more usage and get more people onto video on demand. With the freed up money they needed, saved from the Sky deal, they can spend that money on other things, like buying new content, starting new channels and sponsoring big brother, which they may not have had the funds to do before. It's known that Virgin benefitted little from carrying the Sky channels, so getting people to move from them to their own, with their new sports channel with their advertising likely, their video on demand services they profit from, it will encourage more revenue to them than they got. Plus they have all the funds saved from the Sky deal to go on and pursue these ventures. Meanwhile, use the entire fiasco to set the law against Sky and persuade an investigation which could possibly damage Sky's position.

Seems to benefit Virgin quite a bit, and the fact it was put off to fit in with the timing of events happening now and the fact that it seems Sky really wants their channels on Virgin while Virgin are focussing on their new goals and aren't too bothered about sorting something out could indicate dirty tricks on their part. The extra money, the publicity, ofcom against Sky, the removal of competitors to their plans (sport news channel, video on demand), it seems to have worked out quite well for Virgin...

[frmedinhere]

Just feeling really frustrated today for Virgin Media not offering the 'Red button' service on Sky Sports channels.

There is crucial game between Srilanka - India today and Sky Sports schedule on their website shows that this is the game they will show on the main channel but, at the last moment, they have switched to an average West Indies / Ireland (no pun intended but, I wonder how many Irish people , who have VM, are really interested in cricket anyway). It might be a negative marketing tactic on Sky's part but, I am still frustrtaed with VM for not providing the service I have paid for. Moreover, while advertising, VM does not say that they do not offer full service even though they charge full price for the Sky Sports package.

It's fair to say I am going to get SKY as soon as I can for as a consumer, I get more from SKY than VM.

K.

[Arthurgray50@blu]

I think that this issue is going to backfire big time for Virgin, Virgin have the oppotunity to get back at the table, but they are not interested, it the same that happened with Virgin and BA, it ended up in court.
What Sir Richard should have done, was say we will talk, but keep the channels on, so the COMSUMER, (thats us WHO pay Virgin), doesn't get left out, while the 'kids' fight over who is getting the biggest sweet, thousands of customers are losing out, as they cannot get dishes, especially councils, who are insisting that flat occupiers take them down, and therefore depend on CABLE TV, what should happen, is ALL customers, should read there contracts carefully, and see if this problem is ' a breach of contract of failure to provide a service' - l not trying to cause a war, it is about time WE the customer did something as well - l am fed up to the back teeth with the whole mess.

[c1rcle]

As far as I know VirgiNTL have always said the channels are subject to change at any time & there's never been a set list of channels that they MUST provide us & if there was it would only include the terrestrial channels & any that they have complete ownership of.

[Toto]

Originally Posted by Arthurgray50@blu

I think that this issue is going to backfire big time for Virgin, Virgin have the oppotunity to get back at the table, but they are not interested, it the same that happened with Virgin and BA, it ended up in court.
What Sir Richard should have done, was say we will talk, but keep the channels on, so the COMSUMER, (thats us WHO pay Virgin), doesn't get left out, while the 'kids' fight over who is getting the biggest sweet, thousands of customers are losing out, as they cannot get dishes, especially councils, who are insisting that flat occupiers take them down, and therefore depend on CABLE TV, what should happen, is ALL customers, should read there contracts carefully, and see if this problem is ' a breach of contract of failure to provide a service' - l not trying to cause a war, it is about time WE the customer did something as well - l am fed up to the back teeth with the whole mess.

What opportunity to get back to the table, where did you read that?

it the same that happened with Virgin and BA, it ended up in court.

Remember though that Virgin Airlines won.

You also need to consider this. Sky WOULDN'T move on its price, but it did offer Virgin the chance to keep the Sky channels going, however it (Sky) would bill VM customers directly, without any compensation to VM for carrying it.

Given those options, how could VM go back to the table?

VM have been upfront with their customers, and they have said that they will not hold any customer to term of contract if they want to switch to Sky, providing they cancel before 31st March this year.

Sky are also removing their basic channels of the free DTT platform, and replacing them with a payed service. This would have been an alternative for those who couldn't get Cable or Sky, OR those who could get cable and wanted to view some of the basic channels, but it looks like Sky have caught on to that. The evidence is therefore pretty clear, Sky want YOU to pay for their basic channels, and you have no choice but to go to them if you want those services.

So you as the customer can do something about this, but its going to cost.

I'll stick where I am thank you very much.

[GuestUK]

You also need to consider this. Sky WOULDN'T move on its price, but it did offer Virgin the chance to keep the Sky channels going, however it (Sky) would bill VM customers directly, without any compensation to VM for carrying it.

In one of the news broadcasts with a Sky representative, they mentioned that they did lower the price a few times, as well as offering to throw in extra channels as well as HD content too. It seems like Sky was willing to negotiate to an extent, moreso than it seems Virgin was willing. Virgin walked away from negotiations, not Sky.

VM have been upfront with their customers, and they have said that they will not hold any customer to term of contract if they want to switch to Sky, providing they cancel before 31st March this year.

Originally they were not letting customers out of contracts. It was only after the NCC raised the issue, hit the news, and commented that the least VM could do was allow customers out of contracts. Then Virgin agreed to do so up until the end of March, possible to avoid losing face and the bad PR that would have arisen otherwise.

As for being upfront, the press releases and the messages gave were rather one sided and had a lot of Virgin spin to them, implying Sky withdrew the channels and Sky left the negotiations, and acting as if they are the victim. While I don't know what happened between them precisely, other than the news reports, Virgin's side doesn't really appear to have much to stand on, other than big bad sky was too expensive, but look at our great video on demand service, it's much better than Sky's rubbish channels!

I personally think there is something rather suspicious about the entire ordeal. The flextech deal (for Virgin's channels) and the Sky deal were set to expire at the same time. That way, they could have done the deals together and made sure they were both fair for each other. Instead, Virgin accepted a very large hit in profits, and asked to postpone the Sky deal for 3 months. Sky agreed, and 3 months later, Virgin refuse to pay for the channels and try to make it look like Sky withdrew them (or maybe Virgin was hoping that Sky would return the favour and take cuts for the Sky channels, so they could lower their prices and keep advertising their whole Sky isnt the cheapest place to get Sky ads). Virgin then complain that Sky didn't pay them enough for their channels and abused their monopoly position. Meanwhile, with all the extra cash saved from not buying the Sky channels, Virgin has been quick to start spending money on more VOD content and things like big brother sponsorship, and they have knocked the competition (Sky One) out of the way to Virgin customers, all the while trying to gain public sypathy and challenging Sky in the courts. Seems it worked out quite conveniently for Virgin, without looking like they did anything wrong.

[ntluser]

Originally Posted by GuestUK

In one of the news broadcasts with a Sky representative, they mentioned that they did lower the price a few times, as well as offering to throw in extra channels as well as HD content too. It seems like Sky was willing to negotiate to an extent, moreso than it seems Virgin was willing. Virgin walked away from negotiations, not Sky.



Originally they were not letting customers out of contracts. It was only after the NCC raised the issue, hit the news, and commented that the least VM could do was allow customers out of contracts. Then Virgin agreed to do so up until the end of March, possible to avoid losing face and the bad PR that would have arisen otherwise.

As for being upfront, the press releases and the messages gave were rather one sided and had a lot of Virgin spin to them, implying Sky withdrew the channels and Sky left the negotiations, and acting as if they are the victim. While I don't know what happened between them precisely, other than the news reports, Virgin's side doesn't really appear to have much to stand on, other than big bad sky was too expensive, but look at our great video on demand service, it's much better than Sky's rubbish channels!

I personally think there is something rather suspicious about the entire ordeal. The flextech deal (for Virgin's channels) and the Sky deal were set to expire at the same time. That way, they could have done the deals together and made sure they were both fair for each other. Instead, Virgin accepted a very large hit in profits, and asked to postpone the Sky deal for 3 months. Sky agreed, and 3 months later, Virgin refuse to pay for the channels and try to make it look like Sky withdrew them (or maybe Virgin was hoping that Sky would return the favour and take cuts for the Sky channels, so they could lower their prices and keep advertising their whole Sky isnt the cheapest place to get Sky ads). Virgin then complain that Sky didn't pay them enough for their channels and abused their monopoly position. Meanwhile, with all the extra cash saved from not buying the Sky channels, Virgin has been quick to start spending money on more VOD content and things like big brother sponsorship, and they have knocked the competition (Sky One) out of the way to Virgin customers, all the while trying to gain public sypathy and challenging Sky in the courts. Seems it worked out quite conveniently for Virgin, without looking like they did anything wrong.

No matter what happens everybody loses with this situation.

Virgin would be stupid to generate a problem as Sky One and the other channels are popular and Virgin will lose customers who move to Sky.

Sky really couldn't afford to lose the money from Virgin as now they have to get something like 150,000 Virgin customers to defect to make up the lost revenue.

Sky customers are relatively unaffected though they might not like how Sky operates.

Virgin customers lose the Sky Channels but get Virgin Central on Channel 119 instead. If there were hundreds of programmes to chose from then that wouldn't be so bad but 7 or 8 is not enough. I doubt whether Virgin has enough storage space.

It will be interesting to see what happens when Ofcom investigate. I just hope that Sky and Virgin can come to a deal that's in the best interests of their customers.

[GuestUK]

Well, regardless of the circumstances, the same outcome happened, and Virgin and Sky have both lost out to a point.

Either way, Virgin had to take a gamble - how much were the Sky channels worth to them, and they decided it wasn't worth it. They've publicly commented that they thought the Sky channels were poor and just had patches of good programmes, which they intend to buy themselves and provide via on demand. If they really wanted the sky channels, they could have afforded it, and got extras in the deal too (extra channels), but when it comes down to it they chose not to. Would the majority of customers bbother switching, would the majority of customers miss the Sky channels?

Was it a concern simply that it cost too much and they didn't want to put that cost onto customers (despite having done this many times, and it would have only have been a very small rise if what Sky say is true), or was it so they could have the money to spend on other things (without looking bad by appearing to reject Sky so as to save money, instead make it look like Sky withdrew the channels and they were the heroes spending that money instead to help consumers), trying to get Sky into trouble and making Virgin appear the victim?

[ntluser]

Originally Posted by GuestUK

Well, regardless of the circumstances, the same outcome happened, and Virgin and Sky have both lost out to a point.

Either way, Virgin had to take a gamble - how much were the Sky channels worth to them, and they decided it wasn't worth it. They've publicly commented that they thought the Sky channels were poor and just had patches of good programmes, which they intend to buy themselves and provide via on demand. If they really wanted the sky channels, they could have afforded it, and got extras in the deal too (extra channels), but when it comes down to it they chose not to. Would the majority of customers bbother switching, would the majority of customers miss the Sky channels?

Was it a concern simply that it cost too much and they didn't want to put that cost onto customers (despite having done this many times, and it would have only have been a very small rise if what Sky say is true), or was it so they could have the money to spend on other things (without looking bad by appearing to reject Sky so as to save money, instead make it look like Sky withdrew the channels and they were the heroes spending that money instead to help consumers), trying to get Sky into trouble and making Virgin appear the victim?

Let's hope Ofcom can find the truth and some answers to the questions you've posed.

[GuestUK]

I hope so, and just so I don't appear biased, I don't accept Sky's side too - I feel that there's a lot going on behind the scenes to this diplomacy and deal that neither side is letting on.

Is Sky trying to get full control of their basic channels so they can only be available on Sky Digital? Afterall, their plans to remove their basic channels from Freeview and replace it with a service fully under their control seems to suppose they only want their channels where they have total control over the platform. Then again, they stand to lose a lot of money from advertising revenue from such a move, would it really be worth it? In the short term perhaps not, but if they can get a firm hold on the digital TV market in the UK, perhaps so in the long term. Perhaps they have something else up their sleeve until then, too.

Plus, there's the little matter that Sky keep boasting about the 3p per customer deal they made, but apparently there was a hidden clause in the contract setting a minimum fee which was greater than that, making the 3p per customer thing redundant and useless apart from in PR speak. What was the full story?

I guess we'll just be waiting for the investigation at this point, but I think both Sky and Virgin are plyaing slightly dirty and having their own agendas clouding what should be a simple carriage deal.

[andygrif]

I think you're right...they're both a bunch of you-know-whats...both sides have lied and played dirty with the customers (Virgin's customers) being the ones who have lost out.

However, I am not sure about your allegations of minimum fees, could should provide some additional evidence for these claims please?

[GuestUK]

In addition to my post above, I just wanted to add there's also the issue of Sky taking the chance to try to gain access to the cable network, giving them control over satellite, digital terrestrial and cable, makiing them both rather powerful and rather monopolistic if Virgin let them, or if it is granted by ofcom, which I think Sky is hoping on, or at least trying.

--------------------

Originally Posted by andygrif

However, I am not sure about your allegations of minimum fees, could should provide some additional evidence for these claims please?

Unfortunately, I cant find the original place where I read it, and I'm not sure if its true as it has not been confirmed directly by Sky, however, it is mentioned in numerous news reports by Virgin spokespeople, such as this one and others

Originally Posted by Article

A Virgin Media spokesman said last night: "This price per subscriber calculation is real smoke and mirrors. Basically, it's a flat-fee deal." She claimed the contract offer retained a minimum payment. On Virgin Media calculations, this is believed to push the annual price north of £40m.

Not the best phrasing, but the meaning is conveyed that basically the 3p per customer was nothing more than nice PR speak, the minimum fee was greater than that, and thus that would have been what they paid regardless of it being 3p, 2p or 1p per customer. Such a term, however, is also referred to by Sky here

Originally Posted by Article

Sky refutes Virgin Media's statement that its revised offer "specifically provides for a minimum guaranteed annual payment that is twice the current annual payment."


"Importantly, the minimum guarantees of future revenue which form part of Sky's offer take into account estimates of future subscriber growth provided by Virgin Media during negotiations."

Confirming that a minimum payment was there but denying it is double th current annual payment. Was it more than the 3p per customer Sky was touting so loudly?

But then again, they also entered into negotiations various times and gave different offers, and even went as far as to offer HD and VOD content for their channels, something which would have only strengthened Virgins position, doesn't sound like they were trying to be overly anti-competitive, especially offering VOD content which Virgin can do much better than Sky presently

Originally Posted by Article

"Moreover, Sky is offering Virgin Media substantially more value in the new deal than in the one set to expire, including the option for Virgin Media to carry high definition (HD) and video on demand (VOD) services for these channels.

[andygrif]

Thanks for providing the info....

I'm not sure either, but it could be right to say that £40m pa would include all the subs for additional Sky channels, such as Sports and Movies.

Whilst I'm sure that Sky weren't exactly shy and retiring in their negotiations, the more I read on this subject the more I think that Virgin went out to remove Sky channels from the line-up and we might well see other channels such as movies as the next target for them. Anyone know when the contract is up?

The only sticking point is sport, as Sky do still have a dominant presence in this arena, but Virgin could easily do movies, in fact I bet more people would use VOD for movies that having traditional broadcast channels.