Sky in TV ad threat to take channels off Virgin

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The satellite TV group BSkyB ramped up the stakes in its battle with the newly launched Virgin Media yesterday, taking out television adverts to warn cable customers that they could lose access to many of Sky's channels due to Virgin's reluctance to pay enough for them.

Rupert Murdoch's Sky and Virgin Media, which was formed from the merger of cable groups NTL and Telewest with Virgin Mobile, have been locked in negotiations for the past few weeks to try to agree a price for carrying each other's channels. Virgin Media, of which Sir Richard Branson is the biggest shareholder, launched as a brand last week and promises, for the first time, to provide Sky with serious competition in the pay television market.

However, having failed to strike a deal, Sky has threatened to withdraw its channels from the Virgin network, which would damage the attractiveness of its TV package. Sky is offering a larger package of channels to Virgin than is currently available on the cable network, including Sky One, Two and Three, Sky Sports News, Sky Travel and Artsworld.

Sky has taken out TV adverts calling on Virgin's customers to ring the company's customer services line to lobby against the withdrawal. Sky said yesterday that it wanted Virgin's customers to be able to have access to its channels, but said it would insist on a "fair price ... which reflects the proposed new terms and considerable value of its basic channels".

"We want our basic channels to remain available to NTL-Virgin customers and we're working towards a new agreement that will keep them on air," a Sky spokesman said. "We want to avoid disruption for customers who enjoy these channels but, ultimately, it is NTL-Virgin's choice. We'd urge cable customers who feel strongly about this situation to tell NTL-Virgin what they think."

Virgin said it did not understand Sky's decision to warn its customers publicly that Sky channels may soon not be available on the Virgin cable network.

"Negotiations for the channels are still going so we don't know why they're saying this," said a spokesperson for Virgin. "Unless, of course, their aim is to scare our customers into taking their service. We find Sky's sudden concern for consumers odd, particularly given their plans to unilaterally withdraw this very same content from Freeview users."