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The Competition Commission has made a preliminary ruling claiming that Sky TV is restricting competition in the Pay TV sector, resulting in higher prices and loss choice for UK consumers.
The CC began investigating Sky last year, specifically to determine whether Sky Movies was having a detrimental impact on the film market.
It has filed its first report in public, stating that the industry regulator is considering whether to force Sky to restrict the number of studios it has exclusive deals with.
According to Laura Carstensen, “We have found that, as a result of lack of effective competition, subscribers to Sky Movies are paying more than they otherwise would, and there is less innovation and choice than we would expect in a market with more effective competition.”
Sky inevitably disputes the findings, even though it has twice as many subscribers than all of the other pay TV companies put together.
The CC especially singled out internet broadcasting through IPTV services as one area where it felt consumers could benefit from increased access to film and TV, without significantly impacting Sky’s model.
While Sky’s dominance is undisputed, it is worth noting that this is because the company has taken a number of financial risks to provide a wide content base to consumers, and nearly went bankrupt in the early 1990′s doing so.
Additionally, other terrestrial TV providers such as the BBC, ITV, and Channel 4, have systematically failed to chase many deals. Financial reasons aside, they have not had the capacity to broadcast as much content as Sky.
Movies aside, the result is that, to date, Sky has often been the only UK broadcaster with the ability to show many programmes that otherwise would not be able to be shown in the UK.
This is especially when terrestrial TV continues to be obsessed with chasing reality shows aimed at the lowest common denominator. This is underlined by the relaunch of Big Brother this week, and constant obsession with X Factor.
Meanwhile Sky has sought more discerning audiences, signing up a deal with HBO earlier this year as part of its flagship Sky Atlantic channel.
The result being that Sky remains the only place where viewers can watch programmes such as Game of Thrones, The Wire, new Battlestar Galactica, Spartacus: Blood and Sand, which otherwise may not be suitable for normal terrestrial broadcasting.
It has never been suggested that the BBC, ITV, Channel 4 or 5, or Virgin or BT, even considered such a deal.
In the meantime, Sky has been forced to accede to working with the regulator on the issue.
However, the regulator may want to look at the fact that the BBC, ITV, Virgin Media, and BT are all massive corporations with revenues from the hundreds of millions to billions, and ask why they are not even trying to secure deals where Sky will.
The CC began investigating Sky last year, specifically to determine whether Sky Movies was having a detrimental impact on the film market.
It has filed its first report in public, stating that the industry regulator is considering whether to force Sky to restrict the number of studios it has exclusive deals with.
According to Laura Carstensen, “We have found that, as a result of lack of effective competition, subscribers to Sky Movies are paying more than they otherwise would, and there is less innovation and choice than we would expect in a market with more effective competition.”
Sky inevitably disputes the findings, even though it has twice as many subscribers than all of the other pay TV companies put together.
The CC especially singled out internet broadcasting through IPTV services as one area where it felt consumers could benefit from increased access to film and TV, without significantly impacting Sky’s model.
While Sky’s dominance is undisputed, it is worth noting that this is because the company has taken a number of financial risks to provide a wide content base to consumers, and nearly went bankrupt in the early 1990′s doing so.
Additionally, other terrestrial TV providers such as the BBC, ITV, and Channel 4, have systematically failed to chase many deals. Financial reasons aside, they have not had the capacity to broadcast as much content as Sky.
Movies aside, the result is that, to date, Sky has often been the only UK broadcaster with the ability to show many programmes that otherwise would not be able to be shown in the UK.
This is especially when terrestrial TV continues to be obsessed with chasing reality shows aimed at the lowest common denominator. This is underlined by the relaunch of Big Brother this week, and constant obsession with X Factor.
Meanwhile Sky has sought more discerning audiences, signing up a deal with HBO earlier this year as part of its flagship Sky Atlantic channel.
The result being that Sky remains the only place where viewers can watch programmes such as Game of Thrones, The Wire, new Battlestar Galactica, Spartacus: Blood and Sand, which otherwise may not be suitable for normal terrestrial broadcasting.
It has never been suggested that the BBC, ITV, Channel 4 or 5, or Virgin or BT, even considered such a deal.
In the meantime, Sky has been forced to accede to working with the regulator on the issue.
However, the regulator may want to look at the fact that the BBC, ITV, Virgin Media, and BT are all massive corporations with revenues from the hundreds of millions to billions, and ask why they are not even trying to secure deals where Sky will.
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