What will be the outcome of the BSkyB – Virgin Media bun-fight?
David Hastings unwraps the crystal ball. Although BSkyB’s decision to play “hard ball” with Virgin Media over the cost of carrying Sky’s basic channels has helped to reduce the potency of Virgin Media as a major competitor, this has come at a significant short-term cost to BSkyB’s revenues. And such a strategy could prove problematic if advertisers start to lose patience at later negotiations. BSkyB has usually proven to be very shrewd in its business dealings and strategies, but it has often been helped by a favourable regulatory and political climate (if not deliberate assistance) combined with a lack of a direct competitor to its operations. The support of its News Corporation parent together with the availability of programming from its US Fox offshoot has also been crucial in building the Sky brand, though inevitably it has been the monopoly of the digital satellite pay-TV platform in the UK combined with deep pockets that have helped given BSkyB a sporting rights monopoly in the
