Sky faces movie restrictions from Competition Commission

By Daniel Farey-Jones, mediaweek.co.uk, Friday, 19 August 2011 09:47AM

BSkyB could lose its long-standing hold on the exclusive rights to broadcast movies from the six major Hollywood studios in the first subscription pay-TV window, due to a provisional ruling by the Competition Commission.

The Other Guys: Sky Movies HD feature

The commission decided Sky's control over the rights contributes to a lack of effective competition in the overall pay-TV market and has floated three possible courses of action.

One is to restrict the number of major studios from which Sky may license first-subscription pay-TV window rights.

Another is to restrict the type of rights Sky can license, so that, for example, the distribution method of subscription video on-demand could be made available to other providers.

Also under consideration is compelling Sky to offer any movie channel containing first subscription pay-TV window content created by a rival, a measure dubbed "must retail".

It has opened a consultation on these possible remedies and has set a deadline of 9 September for parties to respond. The separate deadline for responses to its provisional findings is 16 September.

Laura Carstensen, chairman of the movies on pay-TV market investigation, said: "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 – and, if things stay as they are, we see no likely prospect of change."

Sky hit back at the commission in a statement, saying it believes "no regulatory intervention is required and that consumers benefit from high levels of choice, value and innovation across a wide range of providers".

It continued: "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."

This article was first published on mediaweek.co.uk