In 2010, Britain’s Competition Commission began a probe into premium pay-TV movie rights at the urging of broadcast regulator Ofcom. At the time, Ofcom was concerned that the way Hollywood movies were sold and distributed “creates a situation in which Sky has the incentive and ability to distort competition.” Today’ provisional findings from the Commission’s Movies on Pay TV investigation are good news for the Rupert Murdoch-controlled group.
The regulatory body found Sky does not have a “material advantage over its rivals in the pay-TV retail market.” The Commission cited newcomers like Netflix and Lovefilm as providing an alternative for folks looking to access the latest movies at home.
Sky has rights to films from all of the Hollywood majors in the first pay-TV window while Lovefilm and Netflix have premium rights to films from Lionsgate, MGM and others. The Commission says it believes that as rival services increase their subscribers, the barriers to more first-window rights will fall. The commission further said it found that range of content and pricing are equally important to consumers as how recent the movies.
Laura Carstensen, chairman of the investigation said, “For the purposes of our inquiry, the key effect of the market developments is that, as a result of the new options available to them, consumers’ choice of pay-TV platform can more easily be decoupled from their choice of pay-TV movie service. As a result, Sky Movies no longer provides Sky with the advantage that it used to when competing with other traditional pay-TV platforms, like Virgin Media or BT Vision.”
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