It’s been all over the news all week about how Sky and Virgin have parted ways, much to the detriment of their viewers and potentially their shareholders. It definitely was a worthwhile partnership, with Virgin Media providing another channel (and revenue stream) for Sky and Sky providing content for Virgin’s customers. However, no deal was reached in the last few days of bickering and now the stage has been set.
It will be interesting to watch how the two companies will manoeuvre over the next few weeks. Will any Virgin subscribers move to Sky? Will Sky bow to the financial pressure Virgin (or the lack of Virgin) has subjected it to? More interesting, will Virgin roll our alternative content or increase it’s Video-On-Demand offerings to make up for the loss of people’s favourite shows.
At the end of the day, the people who are losing out in the short term are Virgin customers. They have had their favourite shows removed mid-season and although Virgin may be making noises to try and placate them; well, it’s not an ideal place for them to be. Virgin seems to have offered them the option to cancel their contracts without any penalties if they really don’t want to stay. It will be interesting to see how many people take this option.
In the meantime, both Virgin and Sky had best watch out. They are in a position of power at the moment, in that they control their relative delivery channels (satellite vs cable) however IPTV is gaining in strength. If you look at the smoothness of delivery of Joost or the pure choice of free channels on FreeTube, you’ll see it’s not a good time to be arrogant to your customers. The Internet could well kill-off some of these companies if they don’t embrace it and keep listening to what their customers want.