Sky will pay less for indie and even major studio films if the British government forces it to slash movie channel prices, distributors fear. Ofcom, the UK government regulator, is expected to announce in March that it will force satellite broadcaster BSkyB to cut the amount it charges cable rival Virgin Media for its movie channels. BSkyB could have to drop its movie channel prices by up to 39%.
Indie distributors fear that BSkyB will try and make up for the money by low-balling them when it comes to buying movies. “If Sky gets less money from Virgin then it will have less cash to spend on content. It may therefore have an immediate impact on those selling films to Sky on an ad hoc basis,” said one distributor. BSkyB already only pays indies around a third of what it pays a studio for a similar-performing movie, complained another. (more…)