June 04, 2010

Sky HD channels coming to Virgin Media...and more

Official Press Release
I've highlighted in bold points that will make everyone smile. Enjoy the sunshine all!

British Sky Broadcasting and Virgin Media today announced that they have reached agreement for the acquisition by Sky of Virgin Media Television. The companies have, in parallel, agreed to enter into a number of agreements providing for the carriage of certain Sky standard and high-definition (HD) channels.
The agreements cover the following:

  • Sky will acquire VMtv for a total consideration of up to £160 million in cash, with £105 million paid on completion and the remainder paid following the regulatory process. The acquisition will expand Sky's portfolio of basic pay TV channels and eliminate the carriage fees it currently pays for distributing VMtv channels on its TV services.
  • Sky will assume responsibility for selling advertising for the newly acquired VMtv channels from January 2011.
  • New carriage agreements will secure wholesale distribution of Sky's basic channel line-up, including Sky1 and Sky Arts, and the newly acquired VMtv channels, on Virgin Media's cable TV service.
  • For an incremental wholesale fee, Virgin Media will, for the first time, have the option of carrying any of Sky's basic HD channels, Sky Sports HD 1 and Sky Sports HD 2, and all Sky Movies HD channels.
  • Virgin Media will make available through its on-demand TV service a range of content from Sky's basic and premium channels, including the newly acquired VMtv channels. Virgin Media will also have access to red button interactive sports coverage and the opportunity to deliver selected standard definition programming over the internet.
Completion of the agreements is conditional on obtaining merger control clearance in the Republic of Ireland.
Jeremy Darroch, CEO, BSkyB, said: "VMtv is an attractive investment opportunity which complements our existing content business and delivers strategic and financial benefits. We are pleased that, through commercial negotiation, we have been able to ensure wide distribution of our channels to a growing pay TV universe."
Neil Berkett, CEO, Virgin Media, said: "The sale of our channels business has generated substantial value. Together with the new commercial agreements we've announced today, it will allow us to focus more closely on our strategy of exploiting Virgin Media's super-fast connectivity to offer our customers a range of the very best content through a highly versatile next generation entertainment application."
Additional information:
The acquisition of VMtv involves Sky acquiring LIVING, LIVINGit, Challenge, Challenge Jackpot, Bravo, Bravo 2 and Virgin1. Sky will not license the Virgin brand and will announce the new channel brand for Virgin1 in due course.


Krankor said...

I'm still dancing my socks off!

Krankor said...

I guess the next big question is when? :)

BK said...

virgin1 => living2... sky4... or just kill it and make space for sky1 on freeview???

Moroboshi said...

I notice Sky One HD is conspicuous by it's absence. I wouldn't be surprised if it was mysteriously missing from the new line-up whenever it gets announced.

Also this is bad news from a monopoly standpoint. Murdoch now pretty much owns the entire pay TV market in the UK, and as he abuses that power at every possible opportunity this can only be bad news in the long run. What do VM have to bargain with in future when Sky decide on a whim to double/triple their prices?

Harkaway said...

Since this contract runs for nine years, I imagine that the landscape may have shifted to IPTV by that time. I share your worries, Moroboshi, about BSkyB's domination of pay-TV, however.

Still, I'm looking forward to the additional channels when they arrive, although it will really be necessary to have a larger hard drive on the V+.

daniel.wilkes said...

Hi There

Just found this blog yesterday, thanks very much for all of your information.

May I just ask, what exactly does it mean wholesale incremental fee?

sibod said...

Moroboshi :

That's covered by "Sky's basic HD servies" - I.E. Sky Arts HD, Sky News hd, Sky 1 HD.

They separately listed Sky Sports HD and Sky Movies HD.

I doubt Sky One would be held back when they are allowing the more high profile and premium channels like Sports and movies to go to the competition.

Nialli said...

@daniel.wilkes: it means Virgin will Sky extra for the Movies and Sports HD channels. Whether they pass this on to customers or absorb the difference is not known yet.

Nialli said...

Interesting FAQ on the deal at http://www.techradar.com/news/television/sky-s-purchase-of-virgin-media-tv-what-does-it-mean--694106, although they are wrong about there being a Bravo HD channel

daniel.wilkes said...

Thanks very much Nialli

Do you have any idea when Virgin will announce their charges and additions to their packages?

Dennis said...

Cheers for the news Nialli.

Must buy bigger armchair this weekend!

Hard drive expansion is a must.

Nialli said...

There is no word yet as to larger discs for the V+ or pricing/availability for the Sky HD channels. I wouldn't be surprised if they didn't appear together, some time before the new football season (mid-August). Possibly announced with the Q2 results (normally the first week of August)

lee said...

I'm glad that Virgin Media are staying as they are, so they can surely really push forward the TIVO box, hopefully with bigger drive too.

Because of that, I think this is a good deal, we get what we want (even perhaps with a price rise, the offer is there) and VM can focus completely on service provision, and boxes. Win-win I guess!!

A Tory government pleasing LibDems...Sky pleasing VM customers...god knows what is next!!! ;-)

Dinosaur said...

I just spoke to a Virgin engineer at my house. He said that there are another 6-11 HD channels coming to Virgin this month + more in new year. He also said new box coming out in new year with 500GB drive and modem with WiFi included in box (TiVo box?)

nicola said...

All iam waiting for is epixhd to come to virgin and that will blow sky out of the water !

virgin media said...

i deal i cant to c it soon does that mean sky going down then

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