Ofcom set to push for greater competition in pay-TV sector

LONDON - Ofcom is expected shortly to propose a new regulatory regime that will require BSkyB to offer, or wholesale, its premium sport and movie channels to rivals such as Virgin Media on regulated terms.

Sky Sport's cricket coverage
Sky Sport's cricket coverage

Ofcom opened an investigation into the pay-TV market in March 2007, following a submission from BT, Setanta, Top Up TV and Virgin Media, which set out concerns that competition in the pay-TV market was not working effectively.

 Ofcom published its first consultation on the market in December 2007, with a second in September 2008. The regulator will publish a final report later this month.

In the second pay-TV consultation document, Ofcom concluded: "Sky has market power in the wholesale of core premium channels" and outlined a further concern that Sky "will distribute its premium content in a manner that favours its own platform and its own retail business". Ofcom outlined a number of possible remedies to address this; for example, by "intervening to change the way in which key content rights are bought and sold", or by introducing a wholesale regime for Sky's premium channels.

In its report later this month, Ofcom is expected to throw its weight behind so-called "wholesale must-offer" obligations, meaning that Sky wholesales designated premium channels to other pay-TV retailers at regulated terms.

It is thought that while the original complainants would support such a mechanism, the parties are eager for Ofcom to apply any wholesale must-offer remedy to all Sky's premium channels to prevent it withholding certain sports coverage. It is also thought the parties want Ofcom to fix wholesale prices at a level that promotes effective competition.

Sean Williams, managing director, strategy and regulation at BT, said: "The problems being experienced by Setanta throw into stark relief the market failure in pay-TV in the UK. It is also further evidence of the need for Ofcom to remedy the situation swiftly. Competition in pay-TV in the UK is not working effectively."

A BSkyB spokesman said: "BT could use its muscle to bid for content, but prefers to try to get Sky channels on the cheap. Companies which invest and take risks deserve to be rewarded. Setanta's problems are solely the result of decisions taken by its management and shareholders. After two years, Ofcom has found no evidence of excessive profits or high prices."

Ofcom declined to comment.

Topics

Subscribe to Campaign from just £57 per quarter

Includes the weekly magazine and quarterly Campaign IQ, plus unrestricted online access.

SUBSCRIBE

Looking for a new job?

Get the latest creative jobs in advertising, media, marketing and digital delivered directly to your inbox each day.

Create an Alert Now
Share

1 Vodafone, Sky and HSBC join retreat from Google

Several more major brands, including Vodafone, Sky, and a trio of the UK's leading banks, have added their names to the list of those considering suspending their advertising on Google.

Why Cosabella replaced its agency with AI and will never go back to humans
Shares0
Share

1 Why Cosabella replaced its agency with AI and will never go back to humans

In October, lingerie retailer Cosabella replaced its digital agency with an AI platform named "Albert". Since then it has more than tripled its ROI and increased its customer base by 30%.

Just published

More