Who Wins? You decide - Sky or VM (some figure facts)

    Virgin Medias 3.3 million cable customers will have woken to a disturbing sight this morning. No dummy not what's outside, that thing in the corner SKY TV.

    The previous agreement between the two expired at midnight yesterday and with both sides failing to come to terms on a new deal, access to the basic Sky channels is now lost to Virgin Media customers

    Of course, both sides blame each other for the communication breakdown. A statement issued by Sky today claims that Virgin Media rejected all of its proposals, "including our latest offer of just 3p per customer per day." A statement issued by Virgin Media meanwhile claims that Sky rejected all of its proposals and "demanded that the fees for these channels be nearly doubled".

    (Now 3.3 million viewers @ 3p a day is a lorra lorra money, as our Cilla would say, so lets work out just how much we are talking about. 3p a day times 365 days is £10.95 per customer and then times those 3.3 million or 3,300,000 is a whopping £36,135,000.00 that's just over 36 million pounds, sure is a lorra lorra money)

    With much of its most popular programming switched off overnight, Virgin Media risks seeing a steady stream of its 3 million customers defecting to Sky.

    At present though, Virgin Media does not seem overly worried about its potential loss of customers. It has no plans to compensate for the loss of the Sky channels and maintains that it offers good value. In fact, the network has made light of the situation by renaming Sky News, "Sky Snooze try BBC" on its electronic TV guide.

    Of course, Virgin Media will inevitably lose some of its customers to Sky, but in an increasingly connected world, people who are determined to watch the next episode of 24 will watch the next episode of 24 by fair means, or often, by foul. Indeed, the very fact that shows are not freely available will be encouragement enough for some who will track them down outside of the Sky umbrella, free of charge and free of ads.

    The longer the present stalemate continues, it is arguably Sky that stands to lose the most. In the short-term it may win a few more subscribers to its service, but overnight, Sky has lost the ability to reach 3.3 million Virgin customers with its advertising. This could potentially result in the loss of £60m of advertising revenue each year.

    It is widely believed that Sky plans to withdraw Sky News and Sky Sports News from Freeview very soon, a move which would further shrink its potential audience and impact on the advertising revenue so essential for securing the biggest television shows. Of course, Sky may be doing this for a calculated reason. Analysts believe that if Sky were to bundle its basic channels together in a package and levy a small charge directly to Freeview and Virgin Media customers, they would have a revenue stream potentially more valuable than advertising.

    Above all though, Sky is unlikely to back down as it is unwilling to lose face in the larger war of which the current stalemate forms only a small battle.

    So there you have, Mr Murdoch would risk £60M to gain just £36m...duh .. . . . . . . I wonder who is really LOST?? maybe Mr M should have a word with Bart or Homer as they seems to have friends, maybe Homer could have a word with Bill Gates or Tony Bliar (well maybe not Tony bLiar, wmd's and all that lot, he might think it sounded a good deal)

    I for one will carry on with my VM package and who knows, maybe we might get a months free viewing or a months free view of the movie channel, but whatever the outcome, I can't be ar*ed changing my phone, being without a service, changing my DD, years ago we only had 4 channels and we never grumbled so what's wrong now?


    Original Poster

    This just taken from the sky website

    So, if you are a Virgin Media customer and would like to continue … So, if you are a Virgin Media customer and would like to continue watching these programmes, it’s easy to join Sky and keep the TV you love. We want to do everything to make sure you can keep up with your favourite Sky programmes so we’re planning to run all our big shows over a catch up weekend. And we’ll make other shows available on our Anytime on demand service.

    So when is this catch up weekend?

    £36 million is not too much in reality. Industry experts estimated that the old deal was somewhere between £20 and £30 million a year.

    Its all very well Sky advertising that people can switch but I'm in a flat and cannot have a dish. So I'm stuck.

    I was particularly impressed with VM's line in their press release that the money they are saving will enable them to add HBO to their on demand service. Funny, you'd think the prices would of reduced, but no we'll now be able to watch repeats of programmes we saw years ago.

    I said in another thread that both sides have been very petty over all this and neither has considered what their consumers actually want.

    The problem for me, is that part of the reason to get cable/Sky is to get more choice as well as the newer programmes first.

    Currently the channels offered are not really all that great. I mean, you can only have so much nostalgia of old shows, and there are only so many times you can watch Two and a Half Men repeats - no matter how funny the show is

    By the way, a similar thing applies with the Movie Channels in that after you have had it for a month, you have seen all the movies and only get the new movie once every week on the Saturday Premiere.

    In reality, I find myself only watching Sky One and therefore as a VM customer I finds its loss annoying. Not enough to switch, but to reconsider whether I need satellite/cable.

    As for Sky, I suspect the reason that Sky was quite intractable about the whole Sky One package, was that they feel they now have enough difference in terms of Service Quality compared to the current offerings of VM. That is to say, their Sky+ service is constantly raved about by people, their general customer service is pretty good (at least for the non broadband stuff) maybe they think its less and less important to get the advertisers revenue.

    i.e. if they can get thier money back on the Sky+ system, which edits out the adverts, which chain links series together, maybe they are slowly moving towards a new system where they are not so dependant on the advertisers revenue.

    Not that they won't accept it, but perhaps they are hoping to remove the dependancy on it. :?

    I don't know whether it will work or not, but over the years its been quite a safe bet that Sky usually comes out on top.

    We just signed to VM and i gotta say I'm very happy with the TV catch up and tv choice on demand.... took a few hours to figure out the difference but now i'm thrilled!

    Quite annoyed about looseing sky one as wanted to watch LOST but ho hum... theres always the internet for - infact i'll be watching episode 10 tonight!!

    I know my fella was sooooo upset last night cos he couldn't watch Rescue Me on SkyOne - told him to get the boxset

    The 3p a day figure is irrelevant anyway due to Sky's outrageous minimum fee of £120m. (Its a sort of guarentee incase Virign lose or gain a significant number of subscribers.)

    The deal also forces Virgin to remove the Sky channels from their Size M tv package.

    So Sky saying "If Virgin Media truly believes they are not worth the asking price of 3p per customer per day" is such a lie its unbelievable!!

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