Television Case Study Example | Topics and Well Written Essays - 1500 words

Television - Case Study Example stark(a) Media, the Cable play along in which Sir Richard Bransons empire is a major shareholder accused tack of using its dominant placement in Pay-TV to stifle competition. According to monger, the row between the companies started because of the Virgins refusal to pay the asking price. Virgin says that Sky is assay to dominate the market by asking more than double charges for its channels with a view to coerce virgin customers to switch to unfermented providers by denying access to basic channels.Sky maintains that the price it wants is reasonable taking into account the benefits it provides to the Virgin customers. It alike says that it has adoptive a product differentiation along with the price increase by unfolding new high definition service, where the quality of the broadcasting will be better. It denies allegations by Virgin that it is demanding more than double the amount currently paid. (BBC News 2007)According to Richard and Mark (2 007) Sky added that its adjure of 3p per Virgin Media customer per day is still on the table should the cable group wish to return. Sky added that it is still willing to supply its channels directly to cable households. MarketingThe strategy behind the preempt of Sky is to reposition its channel Sky one by revamping it to include live football and UK TV premieres of big US films giving Sky One a content which is being currently offered on a lower floor Skys premium sports and movie channels. Couple with this Sky is providing programmes in High Definition (HD), which it claims as a happen upon selling point. With this differentiation and improvements in the products Sky demanded higher charges from Virgin.Virgin Medias View Point Virgin Media implies that Sky is using its dominance in the market to its advantage. Steve Burch, the Chief Executive of Virgin says we will not lead Virgin Media or our customers to be the victim of Skys market power. Virgin says that it cannot afford to pay the charges being demanded by Sky since as per the costing calculations virgin would end up in paid Sky 1.23 per calendar month per subscriber that is more than one third of the 90p cost outlined by Sky. Moreover Sky is also demanding a minimum guaranteed payment that is twice the current annual payment being made by Virgin to Sky. Virgin has closed the gap with Sky to some extent by signing deals with major content owners to offer programmes on demand - though these do not include US drama 24 and primarily cover older series (Chris Tryhorn 2007) Strategy of Virgin MediaTo combat the pressure from Sky Virgin had already signed deals with some content owners to provide programs on demand. Virgin Media would continue to charge the customers at the uniform level without any reduction for the loss of Sky channels. Virgin says it would compensate the viewers with 2700 hours of on-demand viewing.Effect on the Customers of VirginWith the Sky basic channels going off the cable, the viewers would end up paying more for lesser channels, although Virgin says it will compensate the customers with more hours on-demand viewing. Around 3.3 million subscribers of Virgin would at large(p) channels like Sky One, Sky Travel, Sky News and Sky Sports News. They will not bulge the value for the money they pay to Virgin. This would result in the subscribers switching over to other providers where they may make full value for their money.Effect of BSkyB and Virgin