As I write this on Friday morning it looks as if Virgin Media customers are facing a second weekend without UKTV’s bundle of channels, but even if a last minute deal is done, the cable firm risks having damaged itself with a PR strategy that has seriously backfired.
For a week it’s made a series of public calls to be allowed to air Dave, Home, Really and Yesterday without having to buy UKTV’s pay-TV channels as part of a wider deal, simply because those named channels are available subscription-free on Freeview and Freesat.
But this stance is undermined by the fact Virgin customers have to subscribe to a £25 per month package to watch a bundle of channels, including the UKTV ones, which are largely available free elsewhere.
If it thinks it shouldn’t have to pay to carry free-to-air channels, why does Virgin Media think its customers should have to pay to watch them?
And those subscribers, who’ve endured a series of price hikes in recent years, haven’t been slow at spotting the logic gap in the company’s stance and on social media and in the firm’s own forums have expressed their dissatisfaction.
Having decided a three-way spat between it, UKTV and its own customers wasn’t enough, Virgin has also sought to pull the BBC into the row, lamenting that “due to the restrictions put on UKTV by the BBC, UKTV is not able to provide the significant on-demand programming that we know our customers want.”
The firm has since accused the BBC of acting like “dinosaurs” in the way it decides which content to give UKTV rights to.
But if that’s an accurate description of the BBC’s approach to the broadcaster, what term would we need to apply to Virgin Media which sold its 50% shareholding in UKTV 7 years ago?
Since Virgin Media cashed-out its shares, the BBC and Scripps, the buyer of VM’s stake, have supported UKTV’s very expensive foray into original commissions and first-run US content.
Even at the time of Virgin’s decision to sell up, content access and ownership was incredibly important. But Virgin Media, which had already shed its 100% in-house owned channels, turned itself into a broadband provider which just resold third party content and, at the time, on third party hardware.
So if the BBC is showing dinosaur-like behaviour, what term would describe Virgin Media’s approach in an age where content ownership is increasingly vital to attract and retain customers?
Unsurprisingly there are reports that ITV is seeking to leverage Virgin Media’s current woes by demanding payment for its spin-off and HD channels, or face the loss of even more content.
Virgin’s already struggling to convince everyone that the Paramount Channel’s catalogue of axed and already seen on Netflix programmes is a fair replacement for UKTV’s channels, it would really struggle to come up with credible alternatives to ITV HD (the standard definition has to be provided to it) and the various spin-off offerings.
Can the company really risk ITV delivering on its threats while also lacking UKTV’s 10 channels?
Just imagine how that could that embolden Sky, whose carriage deal with Virgin Media is reportedly up for renewal sometime in the next 12 months and whose content the cable firm already needs to retain customers, to increase its wholesale prices?
But the noise Virgin Media has made this past week means that it doesn’t have the option of quietly backing down and agreeing to UKTV’s terms in order to avoid being squeezed by every other channel owner – the whole industry will know it’s caved and other channel owners will see the potential to hold out for the best possible deal.
The firm’s decision to let the UKTV dispute get so far and so public was a huge tactical mistake which simply serves to highlight Virgin Media’s reliance on third parties for content and risks making it the first port of call for any channel owner looking to recoup their investment in new programming.
