Virgin considers selling UKTV slots

The dispute relates to VoD rights to shows such as Only Fools & Horses

UK cabler Virgin Media is exploring whether to auction off network slots belonging to UKTV, C21 understands, as losses mount for the BBC Studios- and Discovery-owned multichannel operator.

UKTV networks including Dave and Gold have been dark for around four million people in the UK since July 22 after the company failed to agree a new carriage deal with Virgin.

Virgin Media has dropped 10 UKTV channels, affecting free-to-air networks Dave, Drama, Home, Really and Yesterday, as well as pay channels Gold, Alibi, Eden, Good Food and W.

C21 understands broadcasters in the UK are now being made aware that the slots currently occupied by UKTV networks could become available as the dispute between the companies escalates.

While the process to gauge official expressions of interest is not believed to have started yet, the development underlines the impasse between the two companies. Virgin Media declined to comment on the potential auction.

UKTV is understood to be facing losses of around £500,000 (US$650,000) per week due to the loss of both advertising revenue and Virgin’s fees.

Its ratings across all channels have fallen 3.2% since the Virgin blackout, although channels such as Dave and Gold have suffered bigger losses of 10.7% and 15.6% respectively over the same period.

The carriage dispute, which first emerged last month, centres on Virgin’s inability to secure VoD rights for certain UKTV shows, which air on the linear networks. In return, the cable operator wants to slash its UKTV fees.

The BBC holds back VoD rights to shows including Top Gear and Only Fools & Horses, instead selling them to streamers such as Netflix.

In a statement issued at the end of last week, UKTV said Virgin Media had “backed out of a new deal” that had been “verbally agreed” on Friday.

The channels operator added: “Sadly, we can’t, at the current time, see an end date for an agreement to be reached that pays UKTV a fair price for our ongoing services to their business.

“We are sincerely sorry to all of our viewers who have been affected by this. We’ve really learned over the past two weeks just how much our channels mean to people, and we are overwhelmed by your support.”

A Virgin Media spokesperson responded: “We have held constructive talks with UKTV and plan to continue these discussions. We won’t negotiate in public and our door remains open.”

Freeview, the UK’s free digital terrestrial service, has benefited from the dispute with more viewers looking to watch via its platform, according to reports. Meanwhile, Virgin has started airing other channels such as Paramount Network as a result of the blackout.

Earlier this year, UKTV appointed its first original drama commissioner. It has since been ramping up its drama activity, recently co-commissioning Flack for its W network with US channel Pop.