Sky One, Two, Three, News and Sports News will be removed from the Virgin Media service following the breakdown of talks last night. Virgin claimed this morning that Sky were asking for double the previous rate for the cable company to carry the channels.
A statement from Virgin Media this morning said that "following an intensive series of meetings over the last week," it anticipated a withdrawal of these channels by Sky at the end of February.
It went on to say: "The nature of these negotiations leads us to believe that this outcome has been deliberately engineered by Sky in order to suppress competition and coerce Virgin Media's customers into switching to its service by denying them access to the basic channels.
"This view is reinforced by Sky's decision to broadcast, at the height of negotiations on 12 February, a series of promotions claiming that the channels were about to disappear from Virgin Media's network. This was nothing more than a heavy-handed attempt to exert undue influence on the negotiating process."
- Read Virgin Media's statement "Sky Tries to Double Price of Under-Performing Basic Channels" in full
The negotiations do not impact Sky's premium sports and movies channels which will continue to be available to Virgin Media customers.
Virgin Media said that "despite a dramatic and sustained decline in the basic channels' popularity in Virgin Media households" and "the disappointing performance of some recent programming," Sky had consistently demanded a carriage fee more than double the existing arrangement. It added that Sky had continued to demand a price that "bears no relation to the channels' popularity and is radically out of line with the way it values competitors' channels on its own network."
Officially, negotiations are still ongoing with Virgin Media still hoping to seek an agreement on terms that make commercial sense for both parties. At this point, however, it feels that Sky offers no prospect of "a commercially viable agreement" being reached "to continue carriage of these channels on Virgin Media's platform."
Commenting on the anticipated withdrawal of Sky's basic channels, Steve Burch, president and chief executive of Virgin Media said: "Sky's behaviour is a heavy handed and anti-competitive response to that challenge and consumer choice has been reduced as a result. I'm pleased, however, that at a time when they're taking content away, Virgin Media is giving people more."
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