Virgin Media remains thorn in Sky ad income

Sky's dispute with pay-TV rival Virgin Media continues to cost the News Corporation-backed outfit money, with Sky's Q1 2008 results showing the non-carriage of Sky's basic-tier carriage on Virgin Media dented its revenues.

According to Sky's results, the non-carriage of its basic channels, such as Sky One, on Virgin Media's cable network, dented both its wholesale and advertising revenue.

Last year, Sky pulled the channels from Virgin Media after the two sides failed to agree on the price that Virgin should pay Sky for the channels.

The amount of money Sky earns from customers watching its channels on rival pay-TV platforms, termed wholesale subscription revenue, fell by £26m from the same period in 2007 to £136m, while advertising revenue decreased by £10m to £248m.

"Wholesale and advertising revenue reflected the non-carriage of our basic channels on Virgin Media's cable network," Sky said.

Sky's Q1 2008 results also revealed that the satellite pay-TV platform added 56,000 customers in the first quarter to take its total number of subscribers to 8.89 million.

However, its profits dropped heavily year on year, after another writedown on its 17.9% ITV stake, which it is expected to have to sell later this year.

Pre-tax profits were down by 72% to £56m, while revenues were up 8% to £1.25bn.

Source: Media Week