Pubs to drop Sky?

gameboy

U.K. brewer and bar operator Wolverhampton & Dudley Breweries said it was considering dropping Sky television broadcasts from a number of its bars due to price increases.

Finance Director Paul Inglett said Sky TV subscription prices have risen by around 25% in 2005 to about £1,000 a month, and the company is considering whether the subscription generates enough income to cover its cost.

Wolverhampton & Dudley broadcasts Sky TV in about 250 of its 2,500 pubs.

Inglett, speaking in a conference call with reporters, said he thought other pub companies would be considering a similar move.

The bar industry is coming under mounting pressure to cut costs, as a result of rising energy prices and increases in industry regulation-related costs.

BSkyB, which is 37% owned by Rupert Murdoch's News Corp., is the U.K.'s largest pay-TV platform, with nearly eight million subscribers. Exclusive rights to show top-flight football games in the U.K. has been a key growth driver.

As early as August, pub operators were complaining about planned increases in the amount BSkyB charges bars and clubs to subscribe to its sports channels. The operators said BSkyB was hiking prices by around 15% to 20% a year.

BSkyB is estimated to generate £190 million a year from sales to bars and clubs, but that would rise to £240 million by 2007 if it continued to hike prices at the current rate.

A BSkyB spokesman said Sky's service was "good value" for bars.

A person familiar with the matter said internal BSkyB figures showed an average subscription price rise for bars or pubs of 12% when the company raised prices in September 2005. This person said BSkyB operated a "banded" pricing structure reflecting the size and location of pubs so some may have above-average prices.

The person also pointed to comments from Wolverhampton & Dudley in 2003 in which it said it planned that season to cut to 190 from 280 the number of bars taking Sky. About 250 of its pubs continued to subscribe.

Earlier November the European Union reached a tentative deal with U.K. soccer authorities to break up Sky's monopoly on soccer rights for the 2007 to 2010 seasons. However, the broadcaster is still expected to retain the bulk of rights.

Cable broadcaster NTL Inc. (NTLI) told the Premier League, which auctions soccer rights for England's top-20 clubs, that it could construct a competitive model selling rights to pubs if BSkyB were forced to give up 50% of Premiership matches. Most analysts see BSkyB retaining broadcasting rights for over 80% of the 2007-2010 soccer seasons.

Source: Business Online

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Only he who does nothing, does nothing wrong.

Channel Hopper

When raising the price of those watching at home, the incentive is- go down the pub.
When rainsing the price at the pub, the incentive is - go home.

Marie Antoinette ?

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Grassbox

"Most analysts see BSkyB retaining broadcasting rights for over 80% of the 2007-2010 soccer seasons"

Perhaps not if Virgin/NTL merger goes ahead

rolfw

Big problem with the Virgin/NTL deal is their restricted coverage, limited to their cable network and if you think people hate Sky, then listen to their comments on NTHELL.

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spiney

Yes, for all Sky's faults, it does have universal coverage!

Another problem is, despite using (up to) 64QAM delivery, digital cable still has restricted bandwidth, hence fewer channels. What already on it would have to go, to make way for more sports?

Salty25

but, if for arguments sake, the Virgin/NTL company managed (by the grace of God!) to get half the 6 packages, and were half Sky Sports prices, and broadcast their Premiership games via cable and Sky, how much damage could this do to Sky?

I'm presuming of course here that the price hikes are directly linked to subs to Sky Sports, so sorry if i'm horribly incorrect.

rolfw

If they outbid Sky for half of the packages, then without any other programming backup, how are they going to be able to charge less money if they transmit on Astra 28.2 East?

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Salty25

sorry, u've lost me mate i'm proposing a Prem Plus style channel, so only on when matches and highlights are on.

rolfw

Possible I guess, they would have to negotiate a transponder share.

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Salty25

I think you have meconfused. What I mean is that, to be able to broadcast to as much audience as possible, that the Virgin/NTL PremPlus channel would not only broadcast on cable (obviously), but also via Sky, on the EPG, just like Setenta Sport.

Of course, they'd pay Sky to get space on the Astra transponder, but then again why couldnt they do what BBC do, and buy transponder space independently from Astra themselves.

rolfw

It is incredibly expensive to rent a transponder, as it is to enter the EPG, that is the point I'm trying to make, they will have to pay top dollar for the matches, and top dollar for the transponder space and encryption.

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Salty25

This is very true. In my opinion though, if these guys at Virgin are serious, then Premiership rights are the key, its whats kept Sky going, lets face it!

Mind you, if they did have enough money to buy the rights, it follows theyd have enough to get it to broadcast on Sky, youd think !

#1ZERO

rolfw

Neither of those providers have the broadcast rights for the Uk and definitely not commercial rebroadcast rights for the UK. So whilst some pubs have done it, they are on a sticky wicket, this is however off topic and there are at least a couple of other threads arguing that point.

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Leee

I'd say that Sky will get 80% this time....after all, Sky Sports channels are on cable networks so the desired coverage is met and pentration is good enough to actually make money.

Watch how hard Sky makes it for another carrier to get footy up there. No option FTA, Sky controls the PPV (I believe, certainly the encryption). Just how successful is Setanta with their sport channels?

And of course, I have motives in wanting Sky to keep it. Or for TPSCrypt to live on