Sky carriage deal spat mars launch of Virgin Media

LONDON - The launch of the Virgin Media brand today has been marred by satellite broadcaster BSkyB slashing its carriage deal with the company and relieving its rival of substantial revenues.

The deal means that for every subscriber that takes the range of channels owned by Virgin Media's programming arm Flextech it gets only 10p. It was previously getting 40p for these channels, which include Bravo, Living TV, Trouble and Challenge.

The 30p cut in revenues from each subscriber means that the revenues Virgin Media gets from its carriage deal could drop by anywhere up to £30m a year.

The reduction in revenues is only one part of a new spat between the two broadcasters, with Sky refusing to promote the new Virgin Media services in the run-up to the launch of the brand today. Spots are running on all major channels, but Sky has refused to carry those of its enlarged rival.

The TV advertising for the brand features Hollywood 'Kill Bill' star Uma Thurman, and have been created by Virgin Media agency Rapier. The TV works breaks tonight. The TV is supported by press and poster activity, which has been created by Rainey Kelly Campbell Roalfe/Y&R. Online branding by Start Creative and media planning and buying is through Manning Gottlieb OMD.

The creative centres around Thurman enticing people to sign up to the service by offers of what seems to be her phone number in New York.

Virgin Media has also announced that they will unveil a premium package for the new services costing £85 a month. The package, called The Very Impressive Pack includes 10MB broadband, an HD-ready PVR, free TV, mobile phone and unlimited landline calls. The normal quad play packages will retail at £20, £30 and £40 depending on the package.

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1 Brands that forge an emotional tie are best protected from copycats

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