Feeds

Virgin carries out payment freeze threat

Holds £50m to ransom

  • alert
  • submit to reddit

The Essential Guide to IT Transformation

Virgin is witholding £50 million in payments owing to record labels, in its campaign to secure better discount terms for the Virgin Our price retail chain, The Sunday Times reports. The music companies have cut off supplies to Virgin, in retaliation, the paper says. Virgin claims it is being offered worse margins than upstart online music retailers and -- unless its suppliers capitulate -- threatens to stop selling music within two to three weeks in its high street shops. Virgin accounts for 15 per cent of UK music sales, according to the ST. Currently, music represents 45 per cent of the sales mix within Virgin Our Price. The retailer says it will pump up DVD and mobile phone sales, to replace music. The company wants to double its discounts from 10 per cent to 20 per cent and to move music from firm sale to sale or return. The dispute is reminiscent of a spat between Computacenter and Compaq in the early 90s. In its lust for retail sales, Compaq initially offered better terms and conditions to Dixons -- then a PC neophyte -- than to the UK's bigget reseller. Computacenter went public with a warning shot across Compaq's bows. The Virgin/record industry dispute differs in one key respect -- the £50-million held to ransom by Virgin. This may do wonders for Virgin's cash flow, but what will it do for the company's standing with credit rating organisations? Virgin says it will pay up, whatever the outcome of the dispute, the ST reports. So why not pay up now? ® Related story UK retailer threatens music biz with payment freeze

The Essential Guide to IT Transformation

More from The Register

next story
Scotland's BIG question: Will independence cost me my broadband?
They can take our lives, but they'll never take our SPECTRUM
Trying to sell your house? It'd better have KILLER mobile coverage
More NB than transport links to next-gen buyers - study
iWallet: No BONKING PLEASE, we're Apple
BLE-ding iPhones, not NFC bonkers, will drive trend - marketeers
Auntie remains MYSTIFIED by that weekend BBC iPlayer and website outage
Still doing 'forensics' on the caching layer – Beeb digi wonk
Speak your brains on SIGNAL-FREE mobile comms firm here
Is goTenna tech a goer? Time to grill CEO, CTO
NBN Co adds apartments to FTTP rollout
Commercial trial locations to go live in September
Samsung Z Tizen OS mobe is post-phoned – this time for good?
Russian launch for Sammy's non-droid knocked back
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.