In a move that could have significant implications for UK pay TV giant BskyB, UK media regulator Ofcom has asked the country’s Competition Commission to investigate the sale and distribution of subscription premium pay TV movies.
Ofcom said it is “concerned in particular that the way in which these movies are sold and distributed creates a situation in which Sky has the incentive and ability to distort competition. The end result for consumers is less choice, less innovation and higher prices.”
The regulator said the referral to the Commission relates to two specific aspects of the pay TV movie market: the rights to movies sold by the major Hollywood studios to broadcast films for the first time on pay TV and the wholesale supply, based on those rights, of pay TV packages containing movie channels.
The Commission has a maximum of two years to investigate and reach a decision on the concerns raised by Ofcom.
In response to the Ofcom announcement a Sky spokesman told the Guardian Unlimited: “Ofcom is yet again seeking to intervene in a sector in which consumers are being well served. There have never been so many ways to access movies with innovation stretching across a wide variety of channels and platforms, including multiple ways to access Sky Movies. Further prolonging this unnecessary investigation will only create uncertainty and serve to undermine incentives to invest and innovate, which is bad news for consumers.”
The Guardian reported a spokeswoman for Sky rival Virgin Media saying: “We have long argued that current arrangements for the supply and acquisition of premium movies do not serve consumers well. We are pleased that these issues are now going to be the subject of further detailed examination by the Competition Commission.”