Watchdog expresses concern over Sky's pay-TV film domination
Sky dominates pay-TV film rights in this country and should have its stanglehold loosened, the Competition Commission said today.
After a four year investigation, first by the Office of Fair Trading which then referred the industry to the Competition, the findings come as no great surprise. But the potential remedies being suggested by the Commission could do significant damage to BSkyB which is still expected to be taken over by Rupert Murdoch's News Corporation.
Laura Carstensen, Chairman of the Movies on pay TV market 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-and, if things stay as they are, we see no likely prospect of change."
"We have found that, as a result of this 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."
The Commission has suggested three possible ways of forcing Sky to allow more competition. They are:
* Restricting the number of studios from which Sky buys exclusive rights. It currently has exclusive deals with all six major Hollywood studios.
* Restricting the number of movies for which Sky can have exclusive first showing rights so competitors have more access to them.
* Ordering Sky to buy on a wholesale basis and then offer to its subscribers any rival movie channel which has first showing rights Sky rejected the Commission's conclusions and said: "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."
