Closing the whole sale

Continental Europe can teach the UK market a thing or two on the packaging of premium channels, writes Julian Clover.

The football season is a little like the flat racing season in so far as one week the competition ends, the champion jockey announced, and the following day it starts all over again.

In preparation for this the advertisements are already starting to appear, Sky letting BT know that it may have Sky Sports 1 and 2, but the satcaster is holding onto the HD versions and will now have Sky Sports News because the channel is being pulled from DTT. BT, which uses the terrestrial platform to deliver its linear channels will have to wait until around 2012 before it has the ability to send anything other than VOD down the pipe.

Whatever the truth behind the pricing of its £16.99, two channel bundle, it seems hard to believe that the telco did not factor in the possibility of a last minute price increase to consumers that triggered the same on Ofcom’s Wholesale Must Offer ratecard.

In the past Sky has said it would be happy to allow its premium channels onto rival platforms providing that it was able to retain control of the customer. The old HomeChoice would offer its subscribers access to the Sky premium channels through something called Sky by Wire.

It is a similar premise under which Viasat has developed its virtual operator agreements in Scandinavaia. Most recently signing with Com Hem, agreements are also in place with Telia in Sweden, Telenor in Sweden and Norway, Elion in Estonia, as well as with Tele2’s cable TV operation in Sweden.

Under the agreements Viasat offers a collection of both its free and pay-TV channels including the TV1000 movie and Viasat Sport packages.

But Sky is also practicing the scheme overseas, or to be precise its sister company Sky Deutschland is doing so with some of Germany’s cable operators. In May Net Cologne was unveiled as the first participant, Sky forming a part of a new triple play offer by the cablenet, to which both Sky and NetCologne are contributing. Although Sky will continue to hold the relationship with the customer, the billing will come from the cablenet. Pricing is on a par with subscriptions paid on the satellite service.

This was followed last month when Kabel BW and Sky Deutschland agreed to the cabler combining its CleverKabel broadband and telephony offers with Sky subscriptions including the Bundesliga packages.

There is of course a history of such wholesaling in continental Europe where in the days before digital the only time a decoder was needed for the cable package was when the, probably solitary, premium channel was on order.

The arrangement with Virgin, tied up with the sale of the VMtv channels completed this week, is on the face of it a more traditional UK cable deal with the consumer buying straight from the cableco. The UK market may have to learn to love wholesaling.