Will BT really start a pay-TV price war if Ofcom chooses to regulate Sky Sports? Julian Clover assesses the field.
It sometimes takes but a small trigger for an item to make it onto the news bulletins. So it was that a Sunday Telegraph interview with BT Retail chief executive Gavin Patterson made it onto the news agenda.
There was little new in what Patterson had to say given previous interviews on the subject dating back over the three years of Ofcom’s protracted pay-TV investigation, but in coming close to putting a price on what he would like the BT Vision IPTV platform to charge for Sky Sports, he had set a rabbit running. Flopsy was helped on her way by Ofcom’s decision-making process, incorrectly reported to be concluded this week. When the puffs of white smoke do come from Riverside House the regulator is expected a wholesale rate of between £14.55 and £18.55 for the Sky Sports channels.
This was enough to set off discussion about a price war for premium sports, one that in line with the way the modern game is played, is likely to make its first stop in a court of law.
We have to remember what happened the last time there was regulatory intervention on the pay-TV sports. The European Commission thought that the way the Premier League had divided up its pay-TV packages was not fair on the consumer and it was required to ensure no more than five packages were awarded to a single broadcaster. The result was that in addition to their Sky subscription, football fans had to pay another £10 to Setanta. Such thinking does not do the pay-TV sector any favours.
It may well be that Ofcom does regulate the wholesale price of Sky Sports, a similar scenario has already taken place on the French terrestrial system, where multiple packagers can offer the available premium channels. What we are unlikely to see is a price war; more likely operators will cut the cake in different ways.
Triple play works in part by making it increasingly attractive for a customer to take additional services. The Broadband TV News office takes Virgin Media’s broadband offer for £25. It was then a fairly easy decision to add basic TV and a phone line for another couple of pounds. The same will be true of any offer BT puts together.
If we keep Patterson to his word of a price in the mid-teens, you then have to think what else might be on offer, such as a phoneline and broadband connection to pipe Sky Sports through in the first place. Before you know it and you will have a consumer proposition similar to that already available through BSkyB itself and of course Virgin Media. It’s just that the headline figure may look that little more attractive.
