Virgin Media has given further details of the agreement with BSkyB that this week brought an end to the long running carriage dispute. Virgin will pay Sky an annual licence fee of £30 million with a capped performance-based adjustment that allows for an additional £6m and £8m in years one and two respectively and £7.9m for the final seven months of the agreement that expires in June 2011. This puts the cost of the deal, which will see the return of channels including Sky One, Sky News and Sky Sports News, at around £37m per year.
In return Virgin will receive increased payments of at least £24 million for Sky’s carriage of Virgin Media TV channels that include Living, Trouble and Bravo. Under an identical arrangement this could rise up to an equal £37 million when its own performance based incentives are included.
Separately, Virgin has set that one of its two Sit-up shopping channels will no longer be carried on the Freeview DTT platform from next January. Broadband TV News understands that Virgin was outbid in the readvertisement of the capacity.
The cablenet added just 8,300 new customers on the quarter, but among its existing subscriber base added 68,700 new broadband customers, and the number of customers taking its top tier broadband product has grown 78% year-on-year. 19% of customers now take the 4Mbps broadband product and 10% receive 20 Mbps. We believe this to be the first time Virgin has revealed these metrics. 3.88 million subscribers take a broadband service.
Triple play penetration is at an all time high of 54.7%, an increase of 7.7% on 12 months ago.
An additional 43,800 subscribers were added to the V+ personal video recorder bringing the installed base to 468,700. This represents 14% of digital subscribers. Virgin has 3,576,500 TV subscribers, including 3,407,900 digital homes.
Total revenue in the quarter ending September 30, 2008 was £991.1 million, just ahead of Q2, but down from the £1,006.2 million of September 2007. The company attributes the fall to reduced mobile and business revenues.