Sky gets tough with NTL in carriage talks

With a rebrand of Virgin Media just weeks away, ntl:Telewest is facing a double-pronged attack from its rival, in the negotiation room and in its marketing strategy.
Sky is said to have been more ferocious than ever in negotiating its carriage agreements with the cable company and its content division, Flextech.
Media Week reported (12-19 December) that the satellite giant had slashed the amount it was offering for carriage of Flextech channels, such as Living and Bravo, which are part of Sky’s subscription package.
It is understood that Sky is now also demanding far better terms for cable’s carriage of Sky channels such as Sky One, Sky News and Sky Sports News, with Murdoch having instructed his negotiators to take the gloves off in its dealings with the newly merged cable company.
According to one senior industry insider: “Whereas Sky normally goes into negotiations to win, it’s now going in to kill.”
There is speculation that Sky may threaten to withdraw channels such as Sky One from the cable platform if it does not get what it wants from negotiations. However, Sky would lose three million potential viewers to its ad sales efforts if it did.
Also this week, Sky launched a massive marketing campaign to promote its triple-play bundle of broadband, TV and telephony.
Its so-called See, Speak, Surf, claims to undercut NTL on similar products by £10 per month.
A Sky spokesman said: “Sky conducts negotiations based on a very clear understanding of the value that a channel brings to our platform.
“As a matter of principle, we never comment on the state of private negotiations.”