Sky’s strong position in the pay-TV movie market “does not adversely affect competition”, the Competition Commission confirmed today.
Commercial rivals had complained that Sky’s hold over first-show rights gave them an advantage in attracting subscribers to their TV services.
Last year the Commission issued a provisional opinion agreeing that Sky’s deals with the major Hollywood studios meant competition was being restricted.
However today’s final report confirms an initial assessment published earlier this year that the arrival of Netflix and LOVEFiLM’s streaming service means customers have a choice of provider and benefit from competition.
The Commission also noted the arrival of Sky’s own NOW TV movie steaming service which “gives consumers for the first time a choice of subscribing to Sky Movies separately from their subscription to other pay-TV content”.
Today’s ruling also notes: “lthough Sky currently holds the rights to the movies of all six major Hollywood studios in the first subscription pay-TV window (FSPTW), LOVEFiLM and Netflix have already acquired the FSPTW rights of several other studios (responsible for movies such as the Twilight series and the recently-released The Hunger Games) and rights to movies of many of the major studios in subsequent pay-TV windows.”
The commission says “as these rival services increase their subscriber numbers, the barriers to them acquiring further FSPTW rights will continue to fall.”
Laura Carstensen who led the inquiry said: ‘We have seen significant change in pay-TV movie services in the course of our inquiry and have considered the implications of these developments carefully in reaching our final views. It is clear that consumers now have a much greater choice than they had a couple of years ago when our investigation began.
“LOVEFiLM and Netflix are proving attractive to many consumers, which reinforces our view that consumers care about range and price as well as having access to the recent content of major studios; and the launch of Sky Movies on Now TV, which ends the requirement to buy Sky Movies alongside a basic pay-TV subscription, is a further significant development. Overall, we do not believe that Sky’s position with regard to first pay movie content is driving subscribers’ choice of pay-TV provider.”
