Virgin prepares to offer Sky discounts

Virgin Media is planning to offer its subscribers discounts of up to £9.75 in compensation for the loss of Sky-branded channels from its basic packages following the breakdown of carriage talks. The cable operator confirmed today (February 23) that Sky would be withdrawing Sky One, Sky Two, Sky Three, Sky News and Sky Sports News from its basic packages in the next few days.

In a statement Virgin accuses Sky of deliberately engineering the withdrawal of the channels to force customers to switch to its own services. It follows weeks of negotiations over carriage fees for the channels that have failed to draw a successful conclusion. It is understood that Sky has doubled the price it charges for the channels. With increasing amounts of original production, some more successful than others, and key US series Sky One increasingly perceives itself as a premium option “Sky continues to demand a price that bears no relation to the channels’ popularity and is radically out of line with the way it values competitors’ channels on its own network.” Premium channels Sky Movies and Sky Sports are covered by separate negotiations.

The monthly discounts are expected to last for a period of six months, though Virgin executives are hoping that any withdrawal of the Sky channels will be resolved within a few days, as was the case in last year’s dispute with Disney Channel. A spokeswoman for Virgin Media emphasised that any price reductions would be made according to individual customers circumstances and there would be no blanket discounts.
Virgin Media has also issued a cease and desist order against Sky over the satellite broadcaster’s continued references to NTL-Virgin Media. (JC)