~ Updated ~ Virgin Media files against Sky

Updated 13th April 2007 – Virgin Media will be taking Sky to the High Court as the dispute continues. Virgin Media will be filing with regard to Sky’s alleged abuse of dominance. The hope is to agree a reasonable fee for the Sky basic channels, so they can return to the Virgin Media channel lineup, and to expose Sky for – as Virgin Media state – exploiting their dominance of the pay TV market. Virgin Media’s own channels (including Ftn, Living, etc) were up for renewal on the Sky platform some time ago, and Sky offered them a significant drop in price for them to be included on the Sky platform – the rate was allegedly 85% less than what Sky paid for them in previous years. Virgin Media failed to agree a price for Sky’s basic channels and these were removed from the Virgin Media channel lineup on the 1st March this year – Sky allegedly wanted to charge Virgin Media 17 times more to carry their channels – which included Sky One and Sky Travel (but it’s understood the deal probably didn’t include such channels as Sky Three, Sky Movies HD1, Sky Movies HD2 or Sky Arts). Virgin Media accused Sky of exploiting their dominance of the pay TV market for their failing TV channels (with regards to the viewing figures for Sky One). Sky One has seen a significant drop in viewers since it was removed from the Virgin Media channel lineup, and advertisers are likely to demand a reduction in advertising costs, as they are no longer reaching as many households. Steve Burch – CEO of Virgin Media – says “This dispute is one very specific example of how UK consumers are being denied the benefits of a diverse, dynamic and competitive pay TV market. Litigation is obviously a serious step and a last resort but we are determined to have these issues resolved as quickly and fairly as possible.” The official Virgin Media press release is available here.