UK competition regulator seeks to shake up pay-TV market (REU, WSJ, PC)

By Nancy Tartaglione

The UK Competition Commission is looking to shake up the nation's pay-TV movie market.

Reuters reports that the regulator said on Friday, "Many consumers do not consider the other ways of watching movies as close substitutes to Sky Movies," adding that it was inviting responses to possible remedies that would allow rivals like Virgin Media and BT Vision to compete on a more equal footing.

According to The Wall Street Journal, the Competition Commission said would-be rivals are unable to bid successfully against Sky for rights to films from the Hollywood majors in the first pay-TV window because of Sky's large subscriber base.

One third of the UK's 15 million pay-TV households subscribe to Sky Movies which boasts a 15 month exclusivity on many Hollywood blockbusters, PaidContent noted.

Laura Carstensen, chairman of the Competition Commission's movies on pay-TV investigation, said:

Sky has had control of recent movie content on pay TV for many years. At the heart of the problem is Sky's strong position in the pay-TV market, with twice as many subscribers to pay TV as all other traditional pay-TV retailers put together. This provides Sky with a great advantage when it comes to bidding for movie rights, which no rival bidder has yet been able to overcome.

Sky said in a statement:

BSkyB continues to believe that no regulatory intervention is required and that consumers benefit from high levels of choice, value and innovation across a wide range of providers. We note that the CC's findings remain provisional and have been issued for consultation. We will continue to engage with the CC during the ongoing regulatory process.

In the face of the News of the World scandal, News Corp recently halted its efforts to acquire the part of BSkyB which it does not own. It currently holds a 39.1% stake.

Related Links

UK seeks to shake up pay-TV film market (REU)
U.K.'s Ofcom Calls on BSkyB to Change Movie Model (WSJ, sub)
BSkyB Told To Weaken Stranglehold On Hollywood Movies (PC)