UK satellite broadcaster BSkyB has signed a five-year programming supply deal with cable operator NTL which irons out several sticking points between the two companies.
Under the deal - which is subject to the approval of telecom watchdog OFTEL - BSkyB will be paid according to NTL's growth projections, rather than by the number of customers that sign up for BSkyB services.
The move will result in significant cost savings for NTL, as well as guaranteed revenue streams to BSkyB. The high cost of BSkyB channels has been a bone of contention for cable operators for several years.
NTL will also receive all of BSkyB's main channels, rather than the basic package it carries now under a month-to-month arrangement. The two companies have also committed to supplying each other with any new services which are developed in the future - such as pay-per-view sport and interactive TV services. This means BSkyB will gain access to NTL's pay-per-view Premiere League football.
"By increasing the number of NTL customers taking Sky's channels we are growing the overall market so that we both win," said BSkyB chief executive Tony Ball. "We look forward to working with NTL to grow the UK's digital TV universe as fast as possible."
NTL president and CEO Barclay Knapp said: "The five year agreement contains appropriate incentives to ensure both companies continue to develop quality, choice and value in TV programming."