U.K. Competition Commission Clears Sky on Pay-TV Dominance

LONDON: The U.K.’s Competition Commission has confirmed that Sky’s position in the pay-TV movies market "does not adversely affect competition." 

Sky’s commercial rivals had taken issue with its hold over first-run rights, alleging that it gives Sky a subscriber advantage and makes the market anti-competitive. The Commission, however, finds that Sky Movies’ deals with the Hollywood studios is not a sufficient driver of choice when subscribers are evaluating a pay-TV provider. It says that instead consumers attach importance to other services, like having access to a broad range of content and to price.

The findings also cite that the entrance of services such as Netflix and LOVEFiLM have increased competition and consumer choice. The Commission looked at the recent launch of Sky Movies on Now TV and determined that this gives consumers the option to subscribe to Sky Movies separately from their subscription to other pay-TV content.

The decision reaffirms the Competition Commission’s revised provisional findings from May.

Laura Carstensen, the chairman of the Inquiry Group, said: "We have seen significant change in pay-TV movie services in the course of our inquiry and have considered the implications of these developments carefully in reaching our final views. 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; and the launch of Sky Movies on Now TV, which ends the requirement to buy Sky Movies alongside a basic pay-TV subscription, is a further significant development. Overall, we do not believe that Sky’s position with regard to first pay movie content is driving subscribers’ choice of pay-TV provider.

"In our view, competition in the pay-TV retail market overall remains ineffective but we were asked by Ofcom to look specifically at the role of first pay movie content and Sky’s position with regard to these rights. We have concluded that this content does not provide Sky with such an advantage when competing for pay-TV subscribers as to harm competition and, given this finding, we are not proposing any remedies. We note that, were there to be a material change in the circumstances which have led us to our findings, this might warrant renewed scrutiny of these issues. We also note that Ofcom has sought separately to remedy Sky’s position with regard to sports content."