Special pleading from the Bearded One

October 23, 2009

Sky tv has a special place in British wallets. It’s the only way for couch potatoes to get their footie fix, and BSkyB, an offshoot of the worldwide Murdoch empire, knows how to charge for it. This is jolly unfair, Richard Branson writes in Friday’s FT. With more consumer choice, the fans wouldn’t need one of those horrid Sky dishes, or be forced to lock themselves into 12-month contracts with dozens of channels they never watch.

This is all very fine, and Branson likens BSkyB to British Airways before Virgin Atlantic came along to spoil its Heathrow-New York monopoly. Curiously, he can’t find the space in his article to mention which competitor to Sky would be best placed to benefit should Sky be forced to offer films and footie to other broadcasters at regulated prices.

Yep, it’s the cable business formerly known as NTL, into which Beardie injected his Virgin brand in 2006. Cable in Britain is an industry where the costs which have been sunk under the streets will never earn a decent return, going from exciting start-up to technological decline with no boom in between.

Branson has sold down his interest in Virgin Media Inc, but he retains a significant holder, and of course he gets a royalty payment from the use of the Virgin brand.

BSkyB has marketed Virgin Media off the pitch, and on Friday reported that it’s still adding customers. This must be particularly galling for someone whose empire is built on brand, so it’s easy to see why he should be cross. Meanwhile, Data Explorers reports that the short interest in BSkyB shares has jumped to 8 percent this week. Just coincidence.

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