Feeds

Sky faces competition probe over film rights

Ofcom calls in Competition Commission

The Essential Guide to IT Transformation

The Competition Commission will investigate whether Sky is using a stranglehold on film rights to harm its competitors in the pay-TV market.

The communications regulator Ofcom today formally asked for the probe, expressing concerns that because of the way film rights are sold, Sky has "the incentive and ability to distort competition".

"First-run Hollywood movies are particularly important to competition in the pay-TV sector," said Ofcom.

"This is because they are highly attractive to a large number of consumers, who want subscription access to premium high quality movies as close to their box office release as possible. This content is a key factor for many consumers when signing up to a pay-TV service."

The launch of a Competition Commission investigation represents just the latest stage in a battle between Ofcom and Sky stretching back to March 2007. Earlier this year regulators ordered the satellite broadcaster to offer its sports channels to competitors at restricted prices.

Ofcom said its decision to call for a full investigation of film rights was in part motivated by Sky's plans for subscription video-on-demand services.

"The importance of linear movie channels appears to be gradually declining over time," it said.

"In the longer term we are concerned that as Sky develops its SVoD services, its current market power in relation to linear channels could be transferred across to these new services. Therefore, it is unlikely that, absent intervention, competition will develop and consumers will benefit in terms of choice and innovation."

Virgin Media, Sky's main pay-TV rival, had pressed Ofcom to act.

Sky sharply criticised the regulator today.

"Ofcom is yet again seeking to intervene in a sector in which consumers are being well served," it said.

"There have never been so many ways to access movies with innovation stretching across a wide variety of channels and platforms, including multiple ways to access Sky Movies. Further prolonging this unnecessary investigation will only create uncertainty and serve to undermine incentives to invest and innovate, which is bad news for consumers."

The regulator's detailed decision to refer Sky to the Competition Commission is here. ®

Build a business case: developing custom apps

More from The Register

next story
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Amazon says Hachette should lower ebook prices, pay authors more
Oh yeah ... and a 30% cut for Amazon to seal the deal
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Feel free to BONK on the TUBE, says Transport for London
Plus: Almost NOBODY uses pay-by-bonk on buses - Visa
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
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.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Backing up Big Data
Solving backup challenges and “protect everything from everywhere,” as we move into the era of big data management and the adoption of BYOD.
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.