Virgin Media is selling its TV channels to Sky, to focus on the telecoms side of its business. Sky is paying £160 million cash for the channels and will no longer pay carriage fees for Virgin channels to appear on its TV services. The company has also secured a new agreement with Virgin that safeguards the appearance of Sky’s …
Hopefully that'll finally put paid to the stupid bickering and give viewers more choice. Ironic, really. The strengthening of a monopoly will improve choice. VM had better make sure the agreement is well written. I wouldn't put it past Sky to renege just to spite them.
Surely its going to do the exact opposite. Virgin will have no leverage in negocaitions, and now has no content of its own to fall back on (aside from VOD) should sky decide to play hardball again.
So us VM subscribers are going to get ROYALLY screwed, then. I foresee the services withering on the vine, the prices being jacked up, and VM going out of business.
No, you're not
The deal is for nine years and is at no extra cost to Virgin Media viewers. The shareholders will only benefit if customer churn stays the same or decreases and the decision was made that VM customers will NOT be charged more for HD.
Good thing the private sector provides such wonderful alternatives to paying the license fee.
It is now only a matter of time before the NewsMedia juggenaught gobbles up ITV.
Virgin set up their channels to make sure they were not completely dependent on Sky for popular content. How things change.
I must admit to being interested to see what happens to the joint Virgin/BBC channels. I really cant see the Murdochs putting up with working with their acursed enemies.
All hail our Murdoch Overlords!
Read the press release!
This does not affect UKTV channels, which are the ones owned in equal parts by BBC and Virgin Media. This is for VMTV channels only, which were wholly owned by Virgin Media. Sky won't be working closely with VM once the deal is complete.
Sauce for the goose
I think the BBC should put in a complaint to Ofcom.
Get stuffed Murdochs.
What will happen to Virgin 1? Will it become Sky 4? Not that there's much worth watching on V1.
It would be nice to get some Sky content through Virgin's On Demand, though.
virgin 1 - who cares?
>> What will happen to Virgin 1? Will it become Sky 4?
who gives a fuck? it'll be the same worthless shit they show no matter what the channel's called. if it wasn't for those annoying logos they put on the screen all the time nobody could tell the difference between skyX and virginX anyway. their channels only exist to make itv look upmarket.
murdoch= branson = itv = mindless crap
Well, I'm extra glad that when I moved to Virgin for broadband earlier in the year, I stuck to their Freeview offering. God knows how much of their non-free offering will remain intact within 12 months, never mind beyond that.
Carrier and Content
So Virgin Media become nothing more than another delivery mechanism for Murdoch. What are the chances that OFCOM might investigate or break up this virtual monopoly?
as the Tories love Murdoch and would probably get a lot of money not to let this happen.... or am I being too cynical?
I'd rather lose Sky3 than Virgin1. I fear however that I am likely to be disappointed.
Is there any official news on what will happen to freeview and freesat viewers? I cannot see anything in the press release.
Why would this need the approval of the Irish Regulator as virgin do not operate in Ireland?
... SKY also operate Pay-TV in Ireland as well.
"Sky is paying £160 million cash"
Blimey. That's gotta be quite a few suitcases full. Hope they both use the same bank, otherwise Virgin'll need a van or something to haul it over to their own bank and deposit it. Don't forget the lodgement book, lads!
Haven't these people heard of BACS?
BBC and it Veto
The channels that are jointly owned by Virgin and BBC has nice little clauses. If Virgin wants to sell it BBC has to agree to the deal or it sweet venia.
That's just one clause
The agreement between BBC Worldwide (the commercial arm, not the Auntie Public Service Broadcaster), and Flextech (the content/channels arm of the former Telewest) over their joint venture channels (UKTV) has various clauses like this in it. First refusal at buying if the other partner wants to sell is just one.
IIRC - when NTL wanted to buy up Telewest and form a single UK cable company they had to do so in such a way as to avoid a change of control of Telewest as that would have triggered another part of the pre-emption clause in the agreement allowing BBC Worldwide to take control of the UKTV channels in the joint venture. As NTL was bigger than Telewest this was a PITA (for NTL and Telewest), as rather than a standard take over of Telewest by NTL they had to structure the deal so as to avoid triggering that change of control clause. At the time having a content business was seen as being beneficial to the enlarged NTL. Oh how times change!
AND the clauses in this agreement work both ways. This may not have been significant at the time, but now the gubberment is talking about forcing a part-privatisation of BBC Worldwide and/or merger with Channel 4, this becomes relevant to VM as it could be painted as a 'change of control'!
I might be too late with this comment - I think all the WWDC10 and J-Phone stories have pushed this one off the front page radar.
In response to your post I'd presume because VM as a legal entity is registered under Irish laws to take advantage of more favourable accounting/tax rules - thereby making any UK offices simply "branches" of that company.
Happy to be corrected on this though.
Hardly a surprise
Ditching the channels and keeping the delivery mechanism is the best move I've heard them do since they took over NTL and holdings.
Virgin Media wouldn't have been able to support TV, telephone and broadband indefinately, they've been struggling with finances as it appears they are one of the few cable companies that realises that it needs to invest in it's infrastructure. I wouldn't be suprised if you don't hear about VM laying more cable or at least partnering with another to get more cable laid in the UK in the next couple of years due to shedding the channels.
STUPID Chocolate Teapot regulators in UK!
How can it be right for someone to own the only viable UK/Ireland Sat. PayTV platform and own even more of the channels?
The Irish regulators can do ZERO.
Because Sky is Foreign and the Irish Regulators can really only regulate content uplinked from Ireland.
The ONLY thing the Irish Regulators can do is monitor the installing and Selling?
Sky are somewhat over VAT exempt limit. They do charge Irish VAT on installs, but last time I looked they "breaking" the rules and repatriating ALL subscription VAT to UK. Over a certain amount of sales you are obliged to open a local company and charge Local VAT.
Good for Virgin
I agree with AndrueC.
VM should now concentrate on laying Fibre and getting more end user/consumer web ISP subscriptions. People can then get out of copper BT and get good/better speeds. My personal view is that people will be watching Iplayer/Seesaw et al more than standard TV within a few years.. and downloading films on demand, this is the future. Good call VM, now invest your £160,000,000 in Fibre in Basingstoke.
Ha, Ha, very funny!
This £160 Million will be swallowed up in operating costs and dividends to shareholders.
Virgin ARE NOT in the infrastructure business, they will NOT be laying fibre to new areas that were not deemed to be financially viable in the past, just because they have a little bit of extra cash (in relative terms, check out their level of debt!) doesnt mean they are going to throw it away installing fibre to unprofitable areas, sorry, it's nothing personal, just business.
I don't want the Murdoch Group
I have spent the last ?? years not buying anything from the Murdoch empire if I can help it. One of the reasons that I bought this house was that it could get cable. When they tried to break VM a couple of years ago by dodgy negotiating etc, I said right away that we were not changing to Sky.
Why? I don't like the way he tries to decide for us who we should have as a government. They decided it was time for "New" labour and the papers said what Rupert wanted. They decided for us that it was time for Gordon to go. Happily, people on the street didn't follow their instructions right and we have a hung parliament.
Murdoch has done all he can to destroy the BBC. They keep using the word "reform" but they want rid of any large news organisation that might say things they don't agree with.
Listen to Fox news or hear what some people in the USA say about it to hear what he wants for us.
Virgin don't operate in the Republic of Ireland
I'm not really sure why the Irish Regulators are involved. Virgin doesn't operate in the Republic of Ireland, the main cable service (including what was NTL Ireland) is operated by UPC.
I wonder how this is going to impact on UPC? Their HD service is missing all of the sky HD content at the moment.
Hopefully the cozy relationship between Sky and Virgin in the UK won't undermine UPC's bargaining position for channels on Irish cable as they won't be part of that deal.
UPC is part of liberty global, they own / jointly own quite a few channels on the sky line-up too, so they're not exactly insignificant players as one of the world's largest cable and broadband operators.
That being said, Sky doesn't have a broadband, phone & TV bundle in Ireland and UPC's "fibre power" is shaking up that market.