Sky movies boosted by broader competition investigation

Your Highness on Sky Movies Premiere

BSkyB’s position as a dominant provider of premium movie content in the UK, which had been criticised in provisional findings from the Competition Commission (CC), is to be reassessed following recognition by the watchdog that market dynamics had changed since its August 2011 announcement.

These include, in particular, that Netflix has launched a stand-alone ‘over the top’ (OTT) subscription video on demand (SVOD) service streaming movies and other content, and LOVEFiLM has launched a streaming-only SVOD service and enhanced the content available by streaming as part of its hybrid products (streaming and DVD rental by post).

These providers have acquired the rights to stream first subscription pay-TV window (FSPTW) movies from many of the large non-major studios and rights from many major and non-major studios to stream movies in subsequent subscription pay-TV windows. In addition, Sky has announced that it intends to introduce a new stand-alone OTT service including Sky Movies, and has made a number of other changes to its services.

The CC said that it recognised in its provisional findings that, were developments in the market to occur, it would be necessary to take them into account before reaching its final views. It has now published a working paper calling for submissions on how these new services might have opened the competition in the market, seeking views on a range of questions including to what extent services such as Netflix “substitute for traditional bundled pay-TV services and Sky Movies”; and whether the new entrants mean that Sky Movies and the first pay-TV window rights “are likely to remain as significant to consumers in choosing their pay-TV retailer”.

Comments on the working paper, supported with any new evidence that may have become available, are to be submitted by 5pm on Wednesday 28 March 2012. A revised timetable for the investigation foresees publication of further documents for consultation late April 2012, with a final report published in July 2012.

The Commission has a statutory deadline of August 3 2012 to complete the investigation.

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