BskyB finance director Andrew Griffith told the UBS conference the Competition Commission’s judgment that Sky Movies is anti-competitive in on-demand movies “was perplexing… The movies market has never been more competitive.”
“Sky has never traded on exclusivity. Every movie that’s ever been on Sky Movies has had a theatrical release and has been in Asda or Tesco well before it has been on Sky. The average consumer only has to spend 15 minutes on the Internet to realise just how competitive the landscape is, including companies like Netflix.”
The Competition Commission provisionally ruled Sky’s exclusive pay-TV window deals with six Hollywood studios restrictive. It has proposed breaking up those rights or forcing Sky to offer rivals like Netflix, LOVEFiLM and Blinkbox to its own satellite customers.
In its formal reply to the Commission Sky says the new competitive landscape, including the impending launch of Netflix and Lovefilm, has not been taken into account: “It is plain that the three “barriers” to the acquisition of FSPTW [first subscription pay-TV window] movie rights it identifies do not apply to these types of operators. Both Amazon Lovefilm and Netflix have successfully competed for pay TV movie rights in the UK and elsewhere, including FSPTW rights, and there is no good reason to believe that their ambitions are confined to acquiring rights from non-major studios, as they have to date in the UK. Having proper regard to the ability of Internet distributors to compete for FSPTW rights is sufficient to undermine entirely the CC’s preliminary conclusion that “barriers to the acquisition of sufficient FSPTW movie rights to be able to create a movie product which can compete effectively with Sky’s movie products” constitutes a “market feature” capable of giving rise to an AEC.”