Sky Movies gets all clear from Competition Commission

By Rebecca Burn-Callander, managementtoday.co.uk, Thursday, 02 August 2012 11:06AM

Sky's first pay movie deal with Hollywood 'does not adversely affect competition in the pay-TV retail market' concludes the CC.

Sky Movies gets all clear from Competition Commission

Jeremy Darroch can breathe easy today. The Competition Commission has upheld its May assessment of Sky’s pay-TV offering: it’s not anti-competitive and the Commission won’t rein it in.

Fears that Sky has a stranglehold on the movie market because of its relationship with Hollywood – it gets first dibs on first pay movies from all six of the big studios – are unfounded, says the Commission. In fact, consumers are more swayed by a range of content and price than they are by ‘seeing recent movie content’. And, with so many new and improved movie services (the Commission cites the likes of Netflix and Lovefilm) entering the market, subscribers have a wide choice of provider, it reckons.

The top execs at Sky Movies also made the smart move of offering the service to Now TV subscribers, adding to the smorgasbord of choice on offer for film buffs.

The pay-to-watch movie industry is evolving rapidly, adds the Commission. While Sky has cast-iron relationships with many Hollywood stalwarts, Lovefilm and Netflix have acquired the rights to show the first pay movies from the likes of Summit Entertainment, the studio behind the box office smashers Twilight and The Hunger Games.

Laura Carstensen, chair of the Inquiry Group, said: ‘It is clear that consumers now have a much greater choice than they had a couple of years ago when our investigation began. Overall, we do not believe that Sky’s position with regard to first pay movie content is driving subscribers’ choice of pay-TV provider.’

But, and this was Carstensen’s big ‘but’. While competition in first pay movie content sector is fair, the overall pay-TV market, particularly in sport’s content, remains ‘ineffective’, she says. But that wasn’t what the Commission was asked to investigate, she admits. It’s a whole other kettle of fish, and will be looked into separately.

BSkyB has issued a statement welcoming the Competition Commission’s report, saying: ‘Sky considers there to be overwhelming evidence that UK consumers are well served by strong competition between a growing number of TV providers, including those offering movies.’ Basically saying, ‘We told you so’.

So, the battle has been won, but now that Ofcom has lodged a complaint over Sky’s monopoly on sports’ coverage, there will be a few more skirmishes before the content war is over…

This article was first published on managementtoday.co.uk

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