Sky’s position “does not adversely affect competition in the pay-TV retail market,” reports Competition Commission, but “market competition overall remains ineffective.”
The Competition Commission (CC) has cleared Sky of “adversely affecting competition” in the UK pay TV market, a result which has disappointed some of Sky’s competitors, one of whom said “British consumers will continue to pay more than they should.”
The CC published its final report on the subject today after a lengthy investigation. The report confirms the CC’s provisional findings from May, in which it reversed its August 2011 stance that Sky was too dominant in the market.
According to the final report the launch of new services such as Netflix and LoveFilm has increased competition and choice. It also claimed that more consumers attach importance to variation and price than to seeing films earlier and that the recent launch of Sky Movies on Now TV gives consumers a choice of subscribing to Sky Movies separately from their subscription to other pay-TV content.
The report anticipated that “as rival services increase their subscriber numbers, the barriers to them acquiring further first subscription window rights will continue to fall”.
Laura Carstensen, chairman of the Inquiry Group, 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.”
However, she cautioned that “..competition in the pay-TV retail market overall remains ineffective but we were asked by Ofcom to look specifically at the role of first pay movie content and Sky’s position with regard to these rights”.
The verdict has disappointed some of Sky’s market rivals.
A Virgin Media spokesperson said: “Given its finding that the overall pay TV market isn’t working, it’s extremely disappointing the Competition Commission has chosen not to take any action. Until an effective intervention injects real competition into the acquisition of key content rights, British consumers will continue to pay more than they should.”
The spokesperson said the company is considering its next steps.
BSkyB greeted the CC’s decision: “Sky considers there to be overwhelming evidence that UK consumers are well served by strong competition between a growing number of TV providers, including those offering movies,” said a spokesperson. “As this dynamic marketplace continues to evolve, we remain committed to innovating for customers so that UK consumers continue to benefit from choice, value and innovation.”