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Virgin Reaches Agreement to Sell Channels to Sky

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Could this turn out to be a deal that benefits everyone involved?

After months of talks and speculation today Virgin has come to an agreement to sell Virgin Media Television (VMtv) to Sky. The 160m cash deal (with £105m paid on completion) involves the channels LIVING, LIVINGit, Challenge, Challenge Jackpot, Bravo, Bravo 2 and Virgin1. Sky will not license the Virgin brand and will announce the new channel brand for Virgin1 in due course (Sky 4?).

In addition to the cash Virgin will secure wholesale distribution to Sky’s basic channel line-up, including Sky1 and Sky Arts plus - for an incremental wholesale fee - the option of carrying any of Sky’s basic HD channels, Sky Sports HD 1, Sky Sports HD 2 and all Sky Movies HD channels. A range of content from Sky’s basic and premium channels will also be available through its on-demand TV service.

The overall result of this deal is Virgin has now transitioned entirely into a distributor of content rather than also being a creator of it and substantially expanded its broadcast agreements while Sky has expanded its channel portfolio. The £160m Virgin has recouped will go towards enlarging its on-demand and online VOD services. A necessary move with Sky also finally unveiling its Sky Anytime Plus on-demand service this week.

No timeline has been put on the completion of the deal, but speaking to Virgin Media representatives I was told "think months rather than quarters". A good deal all round for both companies and both sets of customers? Looks like...

In related news Microsoft has announced the integration of MSN Video into Windows Media Center. In effect this simply means you won't need to go to website, though that will still remain. It's an inevitable merger and one which adds some value since MSN Video currently has over 1,000 hours of TV shows - many in HD.

Link: Press Release

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