Virgin Media make £160m selling "VMtv" channels for Sky's HD lineup

It's been on the cards for awhile, but now it's finally happened: cable company Virgin Media have sold their "VMtv" channels (Living, Livingit, Bravo, Bravo 2, Challenge, Challenge Jackpot, Virgin1) to satellite rivals BSkyB, in exchange for Sky's basic HD channels (Sky1HD, Sky Arts HD, Sky News HD, etc.), together with the Sky Movies and Sky Sports HD suites.

The key bullet-points of the Virgin/Sky agreement:

• Sky will acquire VMtv for a total consideration of up to £160 million in cash, with £105 million paid on completion and the remainder paid following the regulatory process. The acquisition will expand Sky's portfolio of basic pay TV channels and eliminate the carriage fees it currently pays for distributing VMtv channels on its TV services.
• Sky will assume responsibility for selling advertising for the newly acquired VMtv channels from January 2011.
• New carriage agreements will secure wholesale distribution of Sky's basic channel line-up, including Sky1 and Sky Arts, and the newly acquired VMtv channels, on Virgin Media's cable TV service.
• For an incremental wholesale fee, Virgin Media will, for the first time, have the option of carrying any of Sky's basic HD channels, Sky Sports HD 1 and Sky Sports HD 2, and all Sky Movies HD channels.
• Virgin Media will make available through its on-demand TV service a range of content from Sky's basic and premium channels, including the newly acquired VMtv channels. Virgin Media will also have access to red button interactive sports coverage and the opportunity to deliver selected standard definition programming over the internet.

This carriage deal is also expected to last until 2019, whereas previous Sky/Virgin deals were reviewed every three years, so viewers won't have to worry about channels being yanked off-air once the dust has settled on Sky's acquisition.

As a Virgin Media customer of 5 years, this is music to my ears. I've been eager to get Sky1 HD for a year now, since I upgraded to a V+HD box, so I'm glad it's finally happening. It's just a shame two of my favourite Sky1HD shows (24, Lost) have finished, but I'm sure something will take their place. Sky's content will also be available via Virgin's on-demand service, which is great.

I'm not fussed about the other Sky channels, but would definitely watch Sky Movies if the option's there. I'm on the top-tier XL package already, but it's not yet clear if Sky Movies/Sports will be available as part of the XL deal, or if you'll have to pay more for those "extras". I suspect that Virgin will amend their prices at some point.

But anyway, is there any serious reason not to go with Virgin Media if you're in a cable-ready area now? I think not.

The only downside for me is that my V+HD box's disk capacity is going to be swallowed up when these HD channels become available!