Virgin Media vs Sky
Earlier this month I woke to the unthinkable, as I turned on my TV and flicked through the channels I noticed something very odd. Several channels were missing! As I worked out which ones had gone it slowly dawned on my what had happened.
For weeks I had been aware of the growing rift between Sky and VirginMedia, as other collegues were more involves in the process and monitoring the situation I had only the faintest idea of how serious things were.
For the past few months the two giant media corporations (and lets not kid ourselves here) were locked in a battle of wills. Sky on the one side wanting to extract a higher fee for the value it had added to its core programs over the last year, while Virgin Media was determined not to bow to the pressure of the market leader.
In the end, when all was said and done there was never any chance that these two companies would ever reach a compromise, because in reality the issue has nothing to do with the fee, its a battle of marketspace.
What about the Customers?
Earlier in the year Sky took the agressive step of buying a large stake in ITV, pre-empting possible action from Virgin Media. Since then the customers of both organisations have been at risk.
Virgin Media spokesperson, John Moorwood, said in an interview with the International Charter that they would be taking steps to acquire programs for distribution via its On Demand service. Until then Virgin Media customers will have no way to access the programs... or no legal way. A number of customers have claimed to turn to file sharing networks such as Bit Torrent to download the latest episodes of their favourite shows, in some cases before they've even appeared on Sky.
Impact on Sky
This is an obviously calculated move, however Sky may not have anticpated the negative reaction it has received. A recent study available from iConsultancy suggest that the reputation of Sky has suffered greatly, as VirginMedia has successfully portrayed itself as the underdog, fighting against a bully.
In addition, large Sky advertisers such as Honda, Ribena etc have been quick to pressure the broadcaster into issuing refunds now that its Sky One and SkyNews channels reach a smaller audience.
Impact on Virgin Media
The impact on Virgin Media was epected to be far worse, but the company has managed to fair reasonably well. In reality the only loss to the network is SkyOne. SkyNews is easily replaced by BBC News24, CNN or any number of other international channels. The loss of SkyOne can also be termpered by a frostly outlook for the channel as described in a recent analysis by iConsultancy, which showed that flagship programmes such as Lost were flagging.
The views expressed in this article are those of the author.