Sky pays less for Flextech channels

In a new carriage deal with Flextech, UK platform Sky Digital has shaved some 10% off what it pays for 13 of the UK's most popular cabsat channels, underscoring the increasing power of successful platforms over channel owners.

The five-year deal with Flextech and UKTV, its joint-venture with BBC Worldwide, sees all the 13 channels – which includes UK Gold, Play UK, Bravo and Living – staying on the platform until the end of 2006.

Together, Flextech's wholly-owned and joint-venture channels account for over 20% share of basic tier multi-channel viewing, and currently reach some 36m viewers via Sky – up from 23.5m before the digital platform's launch in 1998.

Though the fee it is collecting from Sky is down 10% on a per-sub-per-month basis, Flextech is expected to recoup the figure through the platform's increasing subscriber base. For instance, the platform added some 218k subscribers in the last quarter of 2001 and intends to lift its total from 5.7m to 7m by the end of 2003.

The new carriage agreement also includes the launch of a radio service Trouble Radio, spinning off from Flextech's teen channel Trouble.

The improved deal for Sky is part of a trend of digital platforms squeezing down the rates they pay for channels: UK cable operator NTL recently negotiated down the fees it pays to carry Discovery's channels, as did Telewest with MTV.