Thanks to Sky, the Sky One channel
is no longer available. They've picked up their ball and gone home.
Foul play? We think so. To have your say, visit
virginmedia.com/fairplay
Of course, the disconnection of Sky One is no more Sky's fault
than the absence of a Ducati motorcycle outside my house is the
fault of Ducati - if I (or Virgin Media) paid the money then it
would be there.
But this situation has more to do with IPTV than it does with
broadcasters waving handbags at each other.
Sky has long understood the importance of owning content -
originally with football and, more recently, with populist US shows
such as Nip/Tuck and Grey's Anatomy, not
to mention the all-pervading Simpsons. So Sky quickly
sealed up deals for broadcasting those shows, and some viewers will
now be switching to Sky to watch them.
But while Virgin Media can't get a deal to broadcast the shows,
it can sign, and is signing, deals to provide them over its
on-demand service. This devalues the importance of broadcast rights
to the shows, and has allowed Virgin to stand firm against Sky's
demands for more money - you can be sure that without such a
capability Virgin Media would have caved to Sky's price-hike - as
its predecessors were forced to do.
The fact that no one was going to back down is obvious from the
advertising both companies have been running - Sky telling people
that the only way to get shows is through its service, while Virgin
is playing the little guy and appealing to our national love of the
underdog.
In fact, this development could work to Virgin's advantage as it
tries to migrate customers towards an on-demand future where every
show is paid for individually. The only question is if customer
acceptance of on-demand is strong enough to convince them that the
Sky just isn't the limit any more.
By Bill Ray for The Register.
This story has been reproduced with permission.
© The Register
2007
