Sky Rejects All Virgin Media Efforts to Find a Solution and Withdraws its Basic Channels

Sky Rejects All Virgin Media Efforts to Find a Solution and Withdraws its Basic Channels

LONDON, March 1/PRNewswire-FirstCall/ -- Sky's basic channels stopped airing on Virgin Media at midnight on the
28th of February following Sky's failure to renew its carriage agreement. Sky
had demanded that the fees for these channels be nearly doubled, despite the
fact that the popularity of their basic channels has declined by 20 per cent
in the last three years.

The withdrawal is limited to Sky's basic channels: their sport and movies
channels are unaffected and will continue to be available to Virgin Media's
customers.

Moving forward Virgin Media will focus on providing its TV customers with
the most comprehensive range of programming available. The money saved due to
Sky's withdrawal of its basic channels will be used to build on a series of
major programming acquisitions over recent months. This includes a wide range
of hit movies and shows, ranging from The Sopranos and Nip/Tuck to Lost and
the OC. The 2,700 hours of programming currently available through its unique
video-on-demand service will be extended to over 6,000 hours by the end of
this year.

Virgin Media's TV service includes Virgin Central, the innovative new
channel that provides viewers with instant access to their favourite shows.

Throughout the dispute, Virgin Media has made continued efforts to reach
an agreement with Sky. On Tuesday evening, after a breakdown in discussions,
we offered to let an independent expert that both sides could trust take a
dispassionate look at the facts and decide what was fair and reasonable. Sky
formally rejected this offer on Wednesday morning and again on Wednesday
afternoon following a personal call to James Murdoch, instigated by Virgin
Media's Chairman Jim Mooney and CEO Steve Burch.

Commenting on the dispute, Steve Burch, said: "We're disappointed but not
surprised by this outcome: nothing Sky have said or done in the course of the
negotiation indicates they had the slightest interest in doing a commercially
viable deal. Their action here is consistent with their plans to withdraw
their free channels from Freeview and, in our view, reflects their desire to
limit consumer choice."

Richard Branson said: "We're sorry that Sky have pulled their basic
channels from our service. These however do not include their sports and
movie channels, which will continue to be available to Virgin Media's
customers. When Virgin Media launched last month, we promised to put the
power of the entertainment industry back in the hands of UK consumers, giving
them the service they deserve and the value they'd expect. Consumers have my
whole-hearted assurance that Virgin Media will not allow this dispute to
prevent us from giving them the freshest and most exciting TV service in the
UK. With Virgin Central and our massive library of on-demand, programming,
there's a lot to look forward to."

Media contacts

Virgin Media:
M: Communications, Nick Fox and Lisa Gordon +44-(0)-207-153-1540/1548
John Moorwood, Virgin Media, +44-(0)1256-752-670 or
john.moorwood@virginmedia.co.uk

Source: Virgin Media

Media contacts - Virgin Media: M: Communications, Nick Fox and Lisa Gordon +44-(0)-207-153-1540/1548; John Moorwood, Virgin Media, +44-(0)1256-752-670 or john.moorwood@virginmedia.co.uk

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