Pay TV subscribers face higher penalties for early cancellation

Nyree Stewart
12 April 2018

Customers who want to escape their pay TV contracts early have to pay for early cancellation, with new research suggesting Sky TV viewers could be hit hardest.

Research from Freesat, the subscription-free satellite TV service, reviewed the cancellation policies of major pay TV service providers including Sky, Virgin, BT, Netflix and Now TV, which revealed Sky customers face the biggest penalties.

Sky TV contracts have a minimum length of 18 months and customers cancelling early are required to pay a charge of £13.40 for each month left on the original contract. For someone wanting to leave Sky after six months, they would have to pay £161 to do so, Even after a full 12 months’ service, cancelling a Sky subscription would still cost £80.40. 

In comparison, customers of Virgin Media’s Player Bundle are locked into contracts of just 12 months with a cancellation fee of £3 a month for the remainder of their contract, while BT TV customers are charged an early termination charge of £5.50 a month and have a minimum contract length of 18 months. 

Freesat says it looked to compare the cheapest like-for-like packages. 

However, in response Sky argues the research does not compare services on a like-for-like basis, as it says the BT and Virgin services in the comparison come as part of a bundle. 

For instance, the basic Virgin Mix standalone TV service would cost £22 a month with a 12-month contract and charge an early cancellation fee of £10 a month. Meanwhile, BT TV services cannot be purchased without other services such as broadband, which could lead to additional charges if cancelling the total contract.

Sky says: “With like-for-like comparison, we believe our minimum term commitments are thus in line with the services we provide compared to BT and Virgin.”

Households face difficulty cancelling contracts

Meanwhile, a YouGov study of more than 2,000 people with TV subscriptions found four out of 10 (41%) customers who had cancelled a contract with Sky, Virgin, BT TV or Talk Talk in the past year had difficulties doing do. 

In terms of value for money, Sky ranked lowest with 65% of their customers stating the service isn’t good value for money, with many citing the service as overpriced and that they don’t watch many of the channels. Virgin Media fared only slightly better, with 62% of customers ranking the service as poor value for money. 

However, when asked how likely they were to switch services in the next 12 months only 15% of Sky TV subscribers said they would leave. Instead, BT TV saw 19% of customers prepared to switch, while Virgin Media could see 13% jump ship and Talk Talk just 10% of viewers. 

Guy Southam, spokesperson for Freesat, says: “With long contract terms and high early termination charges, people are feeling trapped and discouraged from cancelling their pay TV subscription.

“Our research has shown 99% of the most watched shows of Sky customers are available on free-to-air channels, so it’s understandable that customers are asking themselves if their subscription is really necessary. They could instead switch to free-to-air and top up with a service like Netflix or Amazon, which might offer better value for money without the long-term commitment.”  

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