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A UK watchdog has ruled satcaster BSkyB’s grip on the country’s pay-TV movie market does not damage competition, a decision that has been met with scorn by Sky’s rivals.
The Competition Commission has ruled Sky’s position, which sees it hold exclusive first-window rights to movies from the six major US studios, “does not adversely affect” the market.
This was primarily because emerging OTT services like Netflix, LoveFilm and Sky’s new a la carte service Now TV have increased choice in recent months. Consumers attached more importance to the range of content services offered and pricing than exclusive films, it added.
Attention was drawn to recent first subscription pay-TV window (FSPTW) deals the OTT services had scored, such as Netflix grabbing The Hunger Games from Lionsgate UK and LoveFilm streaming Entertainment One’s Twilight saga.
The ruling, which comes after a five-year investigation, upholds an assessment from May and gives Sky permission to continue with the current system unchanged.
But it also goes against a preliminary report from August last year, which noted Sky’s dominant position stopped pay-TV rivals like BT and Virgin Media competing.
Laura Carstensen, who led the inquiry, said: “It is clear that consumers now have a much greater choice than they had a couple of years ago when our investigation began.
“LoveFilm and Netflix are proving attractive to many consumers, which reinforces our view that consumers care about range and price as well as having access to the recent content of major studios.”
The ruling has sparked anger among Sky’s rivals, with a spokesman for Virgin Media saying: “Given its finding that the overall pay-TV market isn’t working, it’s extremely disappointing the Commission has chosen not to take any action.
“Until an effective intervention injects real competition into the acquisition of key content rights, British consumers will continue to pay more than they should.”
Telco BT, which operates the BT Vision broadband IPTV service, said both the Commission and media regulator Ofcom had “consistently” found UK pay-TV to be “ineffective” and was “therefore very disappointed” about the ruling, despite this again being acknowledged.
The Commission had “misjudged the importance of FSPTW movies from the major studios and has failed to take action to address Sky’s monopoly control,” it added.
Sky welcomed the end of the investigation and claimed there was “overwhelming evidence that UK consumers are well-served by strong competition between a growing number of TV providers, including those offering movies.
“As this dynamic marketplace continues to evolve, we remain committed to innovating for customers so that UK consumers continue to benefit from choice, value and innovation.”
LoveFilm declined to comment, while Netflix could not be reached this morning.
