Virgin Media and Sky bury the hatchet.

4 11 2008

A deal which will see the return of Sky’s basic channels-Sky One, Sky News and Sky Sports News- on Virgin Media television packages has been agreed between the broadcasters Virgin Media and BSkyB.

According to The Guardian, the basic channels will include Sky1, Sky2, Sky3, Sky News, Sky Sports News, Sky Arts and Sky Real Lives. The broadcast on Virgin Media will start on the 13th of November. This deal is contracted to run until June 2011.

Virgin Media was formed by the merger of NTL and Virgin Mobile. As part of the deal, Virgin Media also acquired NTL’s channels-Living, Bravo, Trouble and Challenge. Virgin Media recently also launched its own channel-Virgin 1. Under a second deal, these channels will continue to be broadcasted on Sky.

A row broke out between BSkyB and Virgin Media last year regarding the price Virgin Media had to pay BSkyB in order to broadcast its basic channels. Talks between the two broadcasters broke down and in the end the broadcast of BSkyB’s basic channels on Virgin Media were ceased. Popular shows on Sky One included Lost, 24 and The Simpsons. Sky had hoped that die-hard fans of the American shows would switch to Sky in order to watch them, and at that time, many did. But not enough to make a sizeable impact. Sky lost about 3.5 million audiences (Virgin Media customers) because of the fallout. This means that advertising campaigns carried out on Sky’s channels would have had a lesser impact since the audience would be effectively 3.5 million less and hence the campaign would have failed to reach the wider audience that the advertisers would have hoped it would have. Hence, revenue through advertising would have decreased since advertisers wouldn’t be willing to pay the same amount if it’s reaching less people.

Richard Branson need not worry.

13 09 2008

Richard Branson is under pressure. He is opposed to the proposed BA-AA deal. I don’t think, he needs to worry.

First of all, its a free world. To say that this (BA+AA+Iberia alliance) will create monopoly is exaggeration.

Secondly, he needs to make Virgin Atlantic more competitive. Virgin is known for good customer services. There is always a market for good airlines. Come on Sir Richard, be competitive. A good businessman should never be afraid of competition. Differentiate (Michael Porter), create a niche market and you will reap rewards.

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