July 14, 2009

Virgin getting HD Sky Sports and Movies? Probably not

Someone's just emailed me asking me the likelihood of Virgin customers getting Sky Movies and Sports channels in HD any time soon in light of yesterday's announcements. Having now digested the recent OFCOM report on Pay TV, I'm afraid I have to conclude that I think it is very unlikely in the short or even medium term.
My reasoning is not a result of OFCOM's findings (which may ultimately force Sky to make them commercially available...unless Mr Cameron intervenes) but the revelation that Virgin has a very low take up of the standard definition versions of the Sky sports and movies channels (page 8 of the report). Here's an extract - unfortunately the actual numbers were removed because of the commercial sensititivy but the tone is very clear:
[The]relatively low level of penetration of Sky’s Core Premium channels on cable reflects Sky's wholesale price, which disincentivises Virgin Media from marketing these channels. Only [  ]% of cable customers currently purchase premium content, as compared to [  ]% a few years ago, and [  ]% on Sky’s satellite platform. Evidence, including the recent decline in penetration of Core Premium channels on cable indicates that a substantial proportion of Virgin Media customers who do not currently subscribe to Sky’s Core Premium channels may have an interest in doing so, although evidently not at current prices.
So you have to ask yourself why would Virgin look to add the Sky Core Premium channels in HD if the majority of existing customers haven't even invested in the SD versions? Sky has a greater percentage of Premium channel subscribers at the same price, so it must be that the VM audience isn't as keen on handing over the extra money, prefering the budget options of Setanta/ESPN and now Picturebox. With the best will in the world, selling HD at a £10 premium is a tough sell on cable without factoring in the extra subs for the standard def channels too (an extra £20 - £30 a month depending on the bundle you're on). Painful though it may be for some to hear, it makes more sense for VM to add other HD channels rather than hunt the biggest game in town.
Sadly, assuming that OFCOM will struggle to get any positive reaction from Sky regardless of its strongly worded report, I think it fair to say that Sky Sports and Movies will not be appearing in HD on cable any time soon. Sorry.


lee said...
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lee said...

I can't say I disagree with this. Whilst Nialli appears negative, I don't think he (you) is (are!), I just think it's a very good opinion based on (missing, but obvious) figures.

I just know I'm never going to go Sky, ever (let's hope the NOTW scandal will bring down News International - HA!) so I have accepted I will take what VM choose/are able to offer, and am very happy with Blu-Ray on PS3 anyway for other HD content (if one can save up for it - let's be honest, a box-set of a whole season of something on blu-ray will always be nicer than on-demand :)

Jasmeet said...

A factor affecting subscriptions to premium channels would be the rampant piracy of Virgin TV.

Jonathan said...

Ofcom is currently consulting in this area so it might be an idea to have your say! Worth a try hey?