Tuesday, March 20, 2007

Virgin vs Sky vs ... us the paying subscribers


I feel stupid. The UK's 'free market' system which is supposed to guarantee low prices due to 'real' competition is more often than not a pseudo-free-market. One duopoly is probably the British Airways / Virgin Atlantic control over London's Heathrow Airport. No big surprise that Richards Branson (image to the left), the greedy ex-hippie trying to line his pockets with our hard earned cash, didn't much like the idea of an open skies agreement with the US as it would have brought competition into the market and the prices down.

No big surprise when this self-appointed hero of the small man (read people like you and me), was recently at it again. After taking over NTL (a pretty terrible US cable company selling cable packages to UK TV audiences) his Virgin group refused to pay anylonger for a number of Sky channels. This is partly because a bun-fight has broken out between two billionaires, Rupert Murdoch (aka Darth Vader of the media world) vs Richard Branson (aka ... well, I don't know, nothing complimentary, that much is certain). Sky lost a million or two viewers from the Virgin cable customers who can't tune into its channels anylonger. Advertisers want some of their cash back, of course. And here's an interesting twist in the story. Sky has already budgeted for this loss of advertising earnings and will return money to its advertisers due to its loss in audience share. Compare this to the consumer hero Richard Greed Branson. I wrote to Virgin demanding a reduction in subscription fees seeing that some of my favourite programmes have disappeared without much of a warning. There's been no reply. Richard Greed Branson declared that subscribers would receive no reduction in their subscription fee and people who didn't like that could go to Sky.

I am pleased to see that these operators' activities are currently being investigated by the UK's media regulator. After all, this has been scandalous... and it has been a direct result of a serious lack of competition. These two organisations essentially hold the viewing audience for ransom.

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