Sky told to hand over footy and film rights
Rivals to get access at fair price
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The UK's media regulator Ofcom has told Sky it should offer to sell rights to football games and Hollywood films to other broadcasters at a fair price.
The investigation into pay TV was begun after complaints were made by BT, Virgin, Setanta and Top Up TV. Ofcom reckons that consumers make their choices of which service to go with based on content not the features of different platforms. Big films and live Premiership games are a big draw for viewers and Sky has "market power" in these areas.
Because of this Sky is likely to restrict access to this content to stop rivals competing properly and Ofcom said: "Our review of the evidence indicates that distribution of these channels is indeed limited."
Secondly, Sky could also price wholesale deals at such a level as to make them uncompetitive for rivals. But Ofcom said difficulties in analysing how wholesale margins work meant it was unable to verify this claim.
Ofcom ruled out sending the issue to the Competition Commission at this time. Instead: "We propose to address our concerns by requiring Sky to wholesale designated premium channels on regulated terms." It said would be premature to revisit this until it can see what impact its proposals have on the market. The regulator also ruled out a structural remedy - forcing Sky to split up its business - as disproportionate to the level of consumer harm seen.
A spokesman for Virgin Media said: "Virgin Media has long argued that the pay TV market currently operates in a way that serves the interests of Sky rather than the consumer. We are therefore encouraged that Ofcom has recognised Sky's dominance in the wholesale supply of its sports and movie channels and is proposing to take action compelling Sky to supply these channels to other pay TV providers in a fair and non-discriminatory way. We believe such arrangements are the very least that are needed to deliver consumers lower prices, increased choice and more innovation."
Sky said it welcomed the chance to continue talking to Ofcom and would respond fully in due course.
Interested parties have until 9 December to tell Ofcom what they think of its proposals, available in full here. ®
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COMMENTS
re: It shouldn't go thru
"At the end of the day the companies are meant to compete."
How can they when one of them buys exclusive use of all matches?
At the end of the day, a monopoly breaks the free market that you love so much. A free market to operate needs a fully informed customer. Something that is forgotten in the spin and lies known as "marketing". And deemed necessary and wholly acceptable.
Slightly unclear article....
The Ofcom findings relate to pay per view rights on specific games/films which are negotiated separately from broadcast rights, it also relates to Sky having to offer whole channels for sale to rivals at competitive prices, i.e. Virgin should be able to show Sky Sports 1 for a reasonable price (to virgin)
@Missed the point - is right
What is at stake here is not individual channels, events or films but who will control televisions in the UK. If Sky has the most premium content and enough of it is compelling for people to base their decision on it then Sky locks out the other providers.
In some ways similar to Microsoft with their dominance of the desktop. It effectively locks competition out fro the OS market and not just Word-processing.
If Sky has a wholesale rate that is competitive then we will continue to have choice because the other carriers can offer services that people want.
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