BSkyB Feeling The Heat Of Virgin Dispute

Broadcasting giants BSkyB have today announced strong performance over the third quarter seeing improve sales, despite ongoing legal problems with provider Virgin Media in relation to the price of certain of its channels.

The group reported today that its Sky product had increased subscriber numbers by some 83,000 over the period, with the number of cancelling subscribers also falling over the course of the same. However it did note that whilst sales were up, profits had been affected by the ongoing dispute.

Profits prior to tax fell from £166 million last year to just £121 million, as a direct result of lost revenues from the provision of certain channels through the Virgin Media product package.

Additionally it was also forecast that £15 million a quarter would be the cost of losing out on the Virgin business, which could have a bearing on its pricing policy at some stage down the line.

The group is accused of leveraging its advantage in the marketplace to increase revenues from Virgin Media customers, which the company is unable to allow to pass, pending the outcome of a High Court suit scheduled for the end of next year.

Virgin Media, which charges a fee for subscriptions, pays per channel per viewer, and was incensed at increasing demands from BSkyB, the producer of certain high profile channels such as Sky News and Sky One.

It remains to be seen whether the company will be able to resolve its dispute in order to benefit from the increased profitability, which will no doubt continue to intensify the media interest in the situation.

Shares in BSkyB were today significantly down, losing over 4% of their value after these results were announced.

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