Branson declares war on Murdoch

BSkyB to launch digital terrestrial television service

LONDON — Virgin Media, the re-branded U.K. cable combo created from the merger of NTL, Telewest and Virgin Mobile, Thursday promised to end the dominance of BSkyB in Blighty’s pay TV market. BSkyB responded by announcing that it is to launch a U.K. digital terrestrial television service later this year.

Launching what Virgin Group founder Richard Branson claimed was “a milestone in the history of the media industry,” the new challenger brand unveiled its so-called “quad play” proposition.

This high-tech combination of TV, broadband, mobile and fixed telephony will be aggressively marketed at U.K. subscribers.

“We are coming down Sky’s tailpipe and we aim to kick ass,” threatened Virgin Media chairman Jim Mooney.

Added Branson: “We’ve operated in crowded markets before.

“Twenty one years ago when Virgin Atlantic launched there were 12 airline companies in the U.K.

“Of those only two are still flying. Sky is as dominant as British Airways once were. This is perfect territory for Virgin to move into.”

This latest attempt to kick start U.K. cable, in which the likes of NTL have poured billions of dollars at skeptical British subscribers, involves what it claims is a “revolutionary” new web, Virgin Central, using on-demand technology, and new packages for subscribers.

Of these, the most expensive is a VIP offering — a so-called Very Impressive Package — combining TV, broadband, fixed phone and mobile retailing at a hefty £125 ($238) a month.

Prices start at £11 ($21) a month.

Said Branson: “For the first time there is a single brand set to provide a more extensive range of television entertainment, broadband and communication services than previously offered by anyone in the U.K.

“Our transition to Virgin Media has been underway since last July and will continue over the coming months, as we roll out an outstanding 21st century customer experience in home entertainment and communications.”

Mooney accused Sky of overcharging customers for movies and sports.

He claimed the Murdoch-controlled pay TV operator’s recent purchase of a 17.9% stake in ITV, Britain’s biggest private terrestrial web, was anti-competitive.

“It wouldn’t have been allowed in other countries — certainly not in the U.S.

“Sky systematically suppresses everyone and needs to be dealt with. We are going to attack them aggressively.”

Virgin Media may have the technology but skeptics point to their lack of unique content.

Virgin Central, which bows in U.K. cable homes Feb. 20, features U.S. fare such as “The OC,” “Nip/Tuck” and “West Wing” alongside British laffers like “The Office” and “Little Britain.”

CEO Steve Burch claimed the web would make VOD “simple” and “compelling.”

It will complement Virgin Media’s existing library of VOD including more than 500 movies.

Content topper Malcolm Wall said that more movie deals will be announced in the next 10 days.

As part of Virgin Media’s strategy, the NTL-Telewest content arm, Flextech, is being re-branded as Virgin Media Television.

BSkyB’s new digital terrestrial service, announced Thursday, will include Hollywood movies and British Premier League soccer.

In return for a monthly sub auds will be able to watch via conventional roof top aerials but they will need a new set top box.

BSkyB’s COO Mike Darcey said: “We look forward to bringing some of Sky’s most popular content to digital terrestrial viewers.

“This will give families more choice and increase the availability of leading content and channel brands.”

The development is clearly a defensive move as BSkyB, controlled by News Corp., comes under increasing pressure from competitors.

Not only does the satcaster have to cope with the arrival of Virgin Media, but also with BT’s new entertainment venture, BT Vision.

Irish-based sports outfit, Setanta, this week revealed it too is attempting to erode BSkyB’s market share by launching a terrestrial Premier League soccer channel in Blighty.

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