The news that trade secretary Alistair Darling is referring Sky’s purchase of 17.9% of ITV to an Ofcom review is the latest twist in an increasingly bitter rivalry between the UK’s two biggest non-terrestrial TV carriers.
Virgin Media, the now-renamed NTL who failed to take over ITV and saw their rival take a significant (but not controlling) stake in the company instead, have been running a big campaign against Sky taking a further hold in the UK broadcasting arena. Hang on, says Sky — we’ve done nothing wrong:
When parliament debated the 2003 Communications Act, it expressly considered that plurality would be protected if Sky were to own no more than 20% of ITV…
ITV is a major, public company led by an independent and experienced board. It is inconceivable to suggest that, as a result of a 17.9% shareholding in ITV, Sky would be able to influence ITV’s broadcasting strategy or policies, including programming or editorial decisions, which remain entirely the responsibility of the board and, under its direction, management.
Compared to the £940m pounds Sky paid for its share of ITV, the prospect of the removal of Sky’s content channels from Virgin Media customers costing them £20m in ad revenues is surely small potatoes to the Murdoch-controlled broadcaster — especially as unilaterally cutting the carriage costs of broadcasting the Virgin-owned Flextech channels could cost Virgin £30m.
Slightly bigger would be the loss if Sky would have to bear if it is decided they will have to sell their ITV stake - £100m, the Guardian’s Nils Pratley estimates.
As far as the Communications Act goes, it does look as though Sky’s position is watertight from the letter of the law, if not its spirit — but to be honest, it’s hard to feel any compassion for Virgin Media, either. It’s not as if they’re complaining about Sky’s activities out of an altruistic sense of justice for the consumer, rather that it gets in the way of their own business plans. And one thing’s for sure — with two giant corporations battling each other and spending millions in legal fees to do so, it’s the end consumer who’s going to end up losing out.
Great. So I'm going to lose some channels whoever I defect to, then. I either lose Sky One and FX (Battlestar Galactica, Carnivale style drama) or I lose Living TV and ftn (The L Word). I hate them both - money grabbing bunch of *********. Is it ANY WONDER punters are stuffing all TV companies and downloading stuff illegally from the internet? Is it??
So I lost all my Sky channels yesterday. I'm surprised they don't even give us, the paying viewers, the opportunity to pay for Sky One - just like a 'top up' option like you get on Freeview. It's the distinct lack of chioce we have over this that annoys me - that the only option Virgin have actually given their customers is to shut up or move to Sky.