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Virgin Media vs Sky: Legs need slapping

Squabbling Children
“Give me your channels!” / “No, you’re not having them!” / “I’m telling mum!”

For those of you who’ve been living on the moon for the last few months, Sky’s channels have been removed from the Virgin Media platform recently because the two companies have been unable to agree terms under which the channels should be carried. Virgin says that Sky’s requested price is too high, and is refusing to pay it. It also says that Sky ‘forced’ them to accept a low offer for carriage of it’s channels on Sky’s platform.

Now, Virgin is taking Sky to court over the dispute.

My solution? The judge should get Richard Branson and Rupert Murdoch in the court, slap their legs, make them apologise, and sort out their differences.

This is the most ridiculous argument we’ve heard in a long time. This sort of dispute just wouldn’t happen in any other business sphere? Can you imagine Tesco refusing to stock Heinz beans because they were making too many demands about product placement in the store? No. Heinz beans, like Sky channels, are popular, so not selling them would damage Tesco. Equally, Tesco is an important retailer, as Virgin is an important platform, and not having their beans on sale there would damage Heinz. In psychology terms, it’s a simple choice between a vicious circle or a virtuous circle – and Virgin and Sky appear to be choosing the former.

This has not worked well for either of them. Virgin Media is unable to offer it’s customers the best service, and people have cancelled as a result. Sky’s channels are getting far fewer viewers – in fact, they’ve fallen out of the multichannel top five – damaging their advertising income. Both of them are being in terms of PR, and a court case will also be damaging to both of them – why on Earth would either of them want an investigation into a highly uncompetitive industry?

They need their heads banding together.

I no longer care whose fault this is. Just grow up and sort it out!

This post was filed under: Media, News and Comment.

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Comments and responses

Comment from Fspiders

    14.36, 24/04/2007

What utter rubbish!

Tesco’s would never stock an item that within a day increases 200%. Who would the customer complain to? not Heinz but the poor tesco’s checkout person.

Sky is a bully and needs to be stood upto.

Sky were quick to accept virgins channels at a price they haggled for and then and only then did Sky drop the bombshell of what they wanted for their ever dwindling popular package. 3 wks before the time limit that they gave virgin media to accept their demands sky started an aggressive advertising market on VM customers telling them they were going to lose channels and to demand VM accept their deal.

Sky now tell the public that they are also going to kill fta sky channels on freeview. I see them going to ppv on freeview, another notch for the bully and another blow for the poor.

Surely even you with your attitude of cowering before bullies you cannot expect VM to accept that massive increase and pass it onto their customers.

Take em to court VM and lets hope Sky get reigned in.

Comment from sjhoward (author of the post)

    17.10, 24/04/2007

I’m not sure I’ve an ‘attitude of cowering before bullies’, but that’s by-the-by. You honestly believe that if Heinz double the price of their beans then Tesco wouldn’t sell them? I think you’re deluded. Have you never looked, for example, at the fluctuations in fruit prices? Doubling overnight is far from uncommon.

I agree that Sky are bullying, and I don’t suggest that we merely kowtow to them, I’m suggesting that their strategy is hurting them as much as Virgin Media, and that the companies need to sort the problem out. And as for Sky removing it’s channels from Freeview, you may have missed the news that they have put these plans ‘on hold’ due to the decreased advertising revenue caused by the channels not being on Virgin Media any more.

Sky’s premature advertising campaign was particularly puerile, but no more so than the rest of this ridiculous argument. And Sky have said that they’re happy to sell directly to viewers via the Virgin Media platform, yet Virgin Media have rejected that suggestion – so they’re hardly doing everything they can to restore service for their viewers.

What good will taking them to court do? That would be damaging for both companies, and would probably not find a suitable middle ground. And the money Virgin Media spends on the court case (and associated advertising) will no doubt be far more than the increase Sky is demanding.

There are no angels in this case. It’s two big corporations mud-slinging, and it’s stupid.

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