UK pay-TV probe adds Netflix, LoveFilm

Netfllix and LoveFilm will be considered as part of an expanded UK investigation into the domestic pay-TV market, in a move that could ease regulatory pressure on satellite broadcaster BSkyB.

The Competition Commission (CC) said today there had been a “number of potentially relevant market developments” since it made a provisional ruling last August that Sky’s position in the UK pay-TV movie market resulted in higher prices and reduced choice for subscribers.

Citing Netflix’s launch in Janaury, LoveFilm’s new streaming-only subscription VoD service and Sky’s plans to introduce a new stand-alone over-the-top (OTT) service that will include Sky Movies, the regulator said it was now necessary to consider the implications of these.

“The development of stand-alone OTT subscription services provided by LoveFilm and Netflix since our provisional findings offers consumers a significant new source of movies on-demand that is independent of traditional pay-TV retailers, including Sky,” said the commission in its latest statement.

It added that as of last August, though it was likely internet-delivered movie content would grow in popularity, it was “unclear both how this development would take place and how quickly it would happen.”

In January, Hollywood’s biggest studios, including Disney, NBCU and Paramount, spoke out in favour of Sky and against the CC’s provisional ruling, complaining it had failed to take into account of new entrants like LoveFilm and Netflix.

The CC, an independent public body set up by the UK government to regulate competition between companies, has now set July as the publication date of its final report.