Stephen Burch sometimes sounds like a lovelorn teenager, hanging (to borrow from that most plaintive of Debbie Harry choruses) on the telephone. "I'd take his call in a heartbeat, and even have dinner with him," he told anyone willing to listen last week.
And what a couple they'd make - Burch, the chief executive of Virgin Media, and James Murdoch, the chief executive of BSkyB.
Actually, forget Debbie Harry - surely Shakespeare can provide us with a better fix on this. It is, perhaps, a classic playing-out of Romeo and Juliet syndrome. After all, their two tribes are at war, Virgin having served a writ on Sky following the breakdown of talks about how much Sky wants to charge Virgin for carriage of its basic package of channels.
On the other hand, this is hardly an analogy worth pursuing. We at Campaign have no stomach for unhappy endings. Nor do advertisers - and from an advertising perspective, it's hard to see any good coming from this stand-off. Certainly not in the short to medium term.
Recent results from both camps might tend to bear that out, although it would be unwise to read too much into the figures, given that in both instances, they cover the first quarter - and Sky's basic tier of channels was withdrawn from the Virgin Media cable TV platform as recently as 28 February.
But that doesn't stop the numbers from being rather intriguing. And let's not forget, too, that the High Court writ is not the only battle in this war. The trade secretary, Alistair Darling, is currently pondering whether or not to refer Sky's acquisition of a 17.9 stake in ITV to the Competition Commission.
His decision will almost certainly (the cynics say) have a bearing on the outcome of the next General Election, as well as affecting the balance of power in the commercial TV landscape; if Sky is forced to sell this stake, Virgin is expected to resurrect plans to take over ITV. And Sky could suffer a regulatory setback with Ofcom investigating its application to broadcast pay TV offerings on Freeview.
1. Virgin Media's figures for the first quarter, released last week, caused widespread confusion. Total subscriber figures across all products (telephone, broadband, mobile and TV) were down by a net 46,900 - a decline the company blamed on the dispute with Sky. Closer examination of the numbers, however, reveals that Virgin actually recorded a net gain of 36,100 TV customers - although it's true that growth in TV customer acquisitions had been higher in previous quarters. It may also be true that the dispute will make a more significant impact on second-quarter figures: Virgin revealed that in the first week after Sky's channels were withdrawn, more than 137,000 customers called to complain. Virgin's worst-performing division in terms of revenue decline was, however, mobile, the only one where the dispute isn't a factor. Virgin now has a total customer base of 4.8 million.
2. For the January to March period, Sky made a profit of £218 million on revenues of £1.16 billion. In the corresponding period, Virgin made a £15.3 million loss on revenues of £1.02 billion. Sky reported its highest quarterly net subscriber additions in six years, and has successfully reduced churn by phasing out the viewer discount offers that have in the past attracted only short-term subscribers. Net new customer subscriptions were up by 51,000 and average revenue per user reached a record £406 per annum. It now has 8.49 million customers. And the profile of its customer base is simpler than Virgin's, because all have at least minimum tier TV subscription.
3. Both Sky and Virgin have been marketing themselves heavily in recent months. Sky's "see speak surf" ongoing ad campaign (budget undisclosed) kicked off in January. Virgin Media's £25 million rebranding campaign, featuring Uma Thurman (who will return in two new brand ads in June), coincided with the official relaunch of the company back in February.
4. Meanwhile, the High Court is conducting a behind-closed-doors review of legal representations made by Sky in answer to Virgin's original writ.
5. In the context of this ongoing squabble, ITV's fate could be crucial. And last week, Murdoch fired a warning shot across the bows of the Government when he voiced his frustration at what he believed was continuing dithering by Darling, who must decide by 26 May if Sky's stake in ITV should be investigated further.
WHAT IT MEANS FOR ...
- Customers of the ntl and Telewest cable operations now housed under the Virgin Media brand had been bracing themselves for a measure of upheaval - for instance, their e-mail addresses will no doubt be tweaked at some stage to feature the Virgin domain name.
- So, further layers of uncertainty are, at the very least, extremely irritating. While the dispute drags on, the main thing that consumers will take from the whole affair is the perception that, while Virgin is largely an infrastructure company, Sky has both infrastructure and premium content.
- So, all things being equal, if you're a Virgin subscriber, it might be time to consider switching. On the other hand, the Virgin boss, Sir Richard Branson, is good at positioning himself as the good guy, and there will be those willing to give him the benefit of the doubt in what will be seen, in some quarters, as his virtuous battle with the rapacious Murdoch organisation.
- And Virgin offers a strong broadband product - so if you are a triple or quadruple player, shifting to Sky is not only a terrible hassle, it has its disadvantages, too. But the longer this drags on, the more it will damage Virgin as opposed to Sky.
- The bottom line is that audience figures for the channels no longer available via the Virgin Media platform (for instance, Sky One) have fallen. If that situation looks like persisting, advertisers will seek to renegotiate airtime deals covering 2007.
- Sky stands to lose in excess of £20 million a quarter - a combination of lost carriage fees and advertising revenues.