Selling to the Enemy

The other day virgin announced it had finally sold its main channel portfolio to Sky, this included Virgin 1, Challenge, all Living and Bravo channels. Now considering the public spats between Sky and Virgin you'd think that this is rare indeed. Truth is Virgin has been trying to sell it's channel portfolio since it became Virgin Media. Sky was always in the frame, there were others but sky was always the only candidate to buy these channels.

Now the problem has always been the value of these channels, Sky didn't see much value to them and Virgin did. Hence the period when Sky pulled all its channels from Virgin over the price to show channels on respective platforms. This forced Virgin to regain its channels values. Living was already good but Virgin pushed its value that little bit more. They dropped teen channel Trouble, this in respect was the cheapest move but I'm a firm believer that the audience was there but the channel was stuck in the nineties.  Virgin then built the Virgin 1 brand which in a stroke of genius did 'Living on Virgin 1' this showcased the best of the Living format on a free platform. On top they made some smart purchases for the channel and created a good channel. They then began to turn their attention to Bravo and have pushed that to a new level. This was all backed up by the extra income from the challenge channels.

Now I'm a person who feels sad these channels are leaving Virgin and going to Sky as, Virgin were providing fresh programming. I wanted to see what they would do next, would they look at the Bravo 2 channel, would Trouble make a return, maybe Virgin 1 would have 'Bravo on Virgin 1'.

What next, well Sky have some decisions to make on the way the channels would run in their business. I have a few suggestions.

• Re-jig all Sky's programming across the new channels, Supernatural and 24 would fit perfect on Bravo.
• Living could benefit from Sky's funding to bring more glamor, not that it needs it.
• Bravo 2 could be made more female orientated, with shows like House and Supernatural. 
• Make Living 2 more male orientated with glamor and fashion shows aimed at men.
• Challenge is another income for Sky and Sky will make it more interactive, integrating it with Sky player.
• Virgin 1, will be re-named and should become a showcase channel. I suggest Sky Showcase so it can run 'Living on Sky Showcase' bringing more people to the sky pay channels via the Freeview platform.

So where does this sale leave virgin. Answer is in good place to build itself as a provider but also at risk if ever Sky pulls channels from the platform again.  Virgin still own half of UKTV, though this is being lined up to sell to Channel 4, they also own Film-flex their film on demand system.

Virgin though have to step up their game to be a provider against Sky and the growing IPTV market.

• They need to offer more HD content and a lot of it in their basic package.
• Video on demand needs improving and taking to the next level, a system they launched so well is now dying from lack of upgrades.
• Multi-room and a online offering needed. People have more than one TV and the business should reflect this.
• The program guide needs updating, their system is old clunky, unreliable and has many services that are so stuck in the nineties I'm surprised if anyone still uses them. They need a major and regular overhaul of how their system works. 
• Competitive on demand pricing. People won't hire a film for £4 is you can buy it for £3 or subscribe to several for £7 a month. They won't hire a TV series for more than it costs to buy.

I wish both companies luck but do point out that more channels are only as good as their new content. In today's market, consumers want new formats as quick as they are released globally and they one older content available on demand.