Virgin Media Disputes Sky Price Claim
Virgin Media has disputed Sky’s claims that it has offered significant concessions and a new annual price of 90 pence per subscriber for the carriage of its basic channels.
The two companies are negotiating over the price paid by Virgin Media to carry the basic Sky channels, which include Sky One and Sky Sports News (see Sky Channels To Be Removed From Virgin Media).
Sky claimed that it had cut the overall price it would charge for the disputed channels and had also suspended the part of the charge which covers the channels it intends to take off Freeview later this year.
However, in a statement released earlier today, Virgin said: “Sky is blatantly misrepresenting their offer, which specifically provides for a minimum guaranteed annual payment that is twice the current annual payment. Under Sky’s proposals, there are no circumstances under which Virgin Media would pay anything less than this doubled amount. The pence per subscriber figure they quote is simply not applicable because of the minimum guarantee.
“Sky wishes to double the cost of the existing arrangement for a portfolio of channels whose popularity has declined by 7% every year for the past three years. Moreover, Sky has demanded that Virgin Media remove their basic channels from our entry level TV package.
“This means that, even were terms agreed, Virgin Media would be forced to deprive a significant proportion of their subscribers of Sky’s basic channels. This is nothing short of an attempt to stop Virgin Media giving consumers a better deal so that Sky can maintain their monopolistic position in the market.”
Virgin added: “We find this selective use of facts disingenuous and misleading, but hardly surprising. It confirms our view that Sky have no intention of agreeing a deal on sensible commercial rates and that a withdrawal of these channels is an outcome which they are deliberately trying to engineer in order to suppress competition.”
Steve Burch, Virgin Media’s CEO said: “The latest offer from Sky is nothing more than smoke and mirrors. They continue to demand a price for their basic channels that demonstrates a determination to use their market power to bully competitors and enforce pricing that bears no resemblance to commercial reality.”
Virgin Media: www.virginmedia.com Sky: 08702 40 40 40 www.sky.com