Sky/Tiscali deal to put the wind up Virgin
Wednesday, May 23rd, 2007Sky do a deal with internet rival behind Virgin’s back
Sky have indirectly dealt Virgin a blow which may prove detrimental to the upcoming court case over the carriage fees row.
Tiscali, who and are rivals to both Sky and Virgin in the converged Broadband/TV/Phone service market are in talks with Sky over a deal, which will allow a number of Sky channels – a line up which crucially includes the ones dropped from Virgin in March – to be broadcast on Tiscali’s IPTV platform.
Tiscali are currently in direct competition with Virgin in the Broadband market, and getting hold of the coveted Sky One may attract customers dissatisfied with the media giant’s services.
This would also be advantageous for Sky, as details emerged that Tiscali were willing to accept terms and carriage fees that Virgin were not. This alone makes Sky’s courtroom position more legitimate and makes Virgin look tenacious by comparison, and if the deal goes ahead, then will force Virgin to accept similar terms, or see the value of their TV service diminish.
Critics have been quick to point out that releasing information of the talks with Tiscali before May 26th – the date for when a decision on whether Sky would be subject to further scrutiny over the ITV stake is to be announced – is a cynical tactic designed to scupper legal proceedings in the summer, as the deal is purely speculative and not yet done.
However this is to be expected; Sky see regulatory bodies as being overly authoritarian and are used to playing hardball with people who think they can push them around. Whether this news affects the Trade Secretary’s ruling or not remains to be seen…
