Ofcom ordered to investigate BSkyB stake in ITV
November 2006 saw the news that ntl:Telewest was looking to merge with ITV. This was shortly followed by a round of share buying by BSkyB which ended up with Sky holding a 17.9% stake in ITV.
The government has now stepped into the fray by ordering Ofcom to investigate whether this Sky share purchase was against the public interest. BBC News Online has more on this order from the government.
There was a lot of complaining at the time of all this wheeler dealing last year, and the last week has seen it come to head over negotiations about how much Virgin Media (formerly ntl:Telewest) should pay BSkyB to carry the basic Sky channels such as Sky One.
With the current battle that may see shows like Lost, 24, Simpsons and the Stargate franchise disappearing from Virgin Media cable TV services, it is not clear who stands to gain anything, it may end up being a damage limitation exercise. Virgin Media may lose some customers, but many will remain due to the overall bundle of products available. Sky could see advertising revenue drop, but may recoup some of this if people sign-up to Sky satellite services. One wonders though if those in the negotiations have considered the potential power of broadband. Shows like 24 and Lost are very popular on the peer to peer networks, so those really keen on watching these shows may simply download them rather than spend money to watch something that has been taken away from them. Of course, downloading copyrighted material without the copyright holders permission remains illegal but the numbers doing this need to be considered when playing hardball in contract negotiations.