TV Wars III: Sky unplugs Virgin?

Who’s holding the cards?
I have not written much on the emergence of the new Virgin Media (whose logo reminds me of a tapeworm), not even its rather icky long copy ads (which could be good for a launch, but only a launch and use patronising crap like ‘Telly  vision’ in the copy).  However, there is now a battle in the air.  Sky, one of the best managed players out there, effectively blocked them from taking over the zombie that is ITV and now has made its next move, taking its big ticket programming off the air for cable customers and starting a very public spat.

The Murdoch clan have long known that content is needed to push a platform and have bought all they can. Heavily overpaying for football rights for years, for example, has given Sky yet another USP for many. Sky has dominated pay TV for a very long time in the UK and is just now facing real competiton. Cable was once Balkanised between many small players, then two very weak ones (NTL and Telewest, who could barely turn a profit between them) with customer service so indifferent and JCBs so aggressive (in tearing up suburban streets for years) that Virgin Media’s marcomms only lighty refer to ‘cable’, if at all, in their marketing bumf. However, cable has insane potential for two-way data (30 – 40 megabits, allegedly, for every analogue TV channel – my last analogue cable package had 150+ so do the maths) that no amount of Sky inspired unbundling of circa 1870 copper phone wires can touch. This capacity could allow for services not yet even considered if unleashed and those telephone lines have reached their limit. This dream world of almost unlimited bandwidth at Branson’s fingertips is what really gives Sky nightmares.

So Murdoch plays his content card and Virgin goes to war in the press (and with the OFT). Pretty soon less well informed cable customers will get sick of the spat and switch. The swiftly executed ‘Don’t lose Lost’ Sky adverts suggest a strategy of battering as many customers out of Virgin as possible before being pushed by the OFT (if it is awake for once) and/or a growing public image of being a bully to come to an arrangement. Consumers may have some sense that any Virgin Media channel package they buy in the future could disappear at any time, which will make them relucant to sign up. Virgin may well have to dig deep and get some exclusive content of its own if the law will not help. Trouble is, I’m not sure if there is any left to buy…


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