Virgin Media’s 4 million pay-TV customers face permanently losing UKTV’s 10 channels, which include Dave and Gold, as the cable company looks to auction off the channel slots to rivals.
Virgin Media has temporarily replaced UKTV’s channels – a mix of free-to-air and pay stations including Drama, Alibi and W – after taking them off air following the failure to agree a renewed deal to carry its TV channels.
The channels are home to shows such as Taskmaster, Top Gear, Only Fools and Horses, Red Dwarf, Call the Midwife and One Born Every Minute.
Virgin Media dropped UKTV’s channels at midnight on Saturday, replacing them with a range of channels offering shows including Suits, Designated Survivor, Britain’s Next Top Model, Deadliest Catch and sports programming.
The channels that are occupying the slots are not paying fees because it is meant to be a temporary arrangement in the hope that Virgin Media and UKTV can reach an agreement and resume broadcasting.
However, with the two sides so far failing to enter meaningful renegotiations, Virgin Media has begun the standard process of preparing to find new channels to potentially permanently replace UKTV.
Virgin Media has sent a letter to broadcasters and media companies saying that it intends to seek expressions of interest in taking over the channel slots in the near future.
UKTV, which is jointly owned by the BBC and the US pay-TV giant Discovery, produces some of its own programming but relies on a major deal with the BBC for archive shows, which are some of the most watched.
Virgin Media has called the BBC a “dinosaur” for holding back the video on demand rights to its programming, instead selling digital rights to shows such as Top Gear to players such as Netflix. Virgin Media has said this strategy was no longer acceptable as viewers expect to be able to watch shows on demand.
UKTV says its shows and channels are among the most popular on Virgin Media TV and it is not prepared to accept the huge cut in fees – thought to be in the region of 50% – that Virgin Media is proposing to pay to keep its channels.
UKTV occupies 23 channel slots – including high definition and plus one-hour versions of its 10 channel portfolio – a number of which are in coveted, valuable positions high on the electronic programme guide viewers use. In total, the channel slots are likely to be worth tens of millions of pounds.
If Virgin Media and UKTV fail to reach an agreement, the next step will be to ask for expressions of interest and then issue a request for proposal to companies keen on the channel slots.
If Virgin Media reaches this stage – where rivals will table bids – it will be difficult to reverse the process and UKTV will not have an option to remain on the service.
Last year Channel 4 bid millions of pounds to successfully secure a high-rated channel slot, 106, for E4.
Theoretically, as UKTV is out of contract, it could bid for the slots that are up for grabs but this is unlikely as the dispute with Virgin Media rumbles on.
