Sky Movies no longer gives BSkyB a material advantage over its rivals in the pay-TV retail market, the Competition Commission has found.
In a reversal of its original provisional findings, published last August as part of the Movies on Pay TV investigation, the Commission said the arrival of Netflix and enhancement of Lovefilm had changed its opinion to reflect new available evidence.
It also pointed to Sky’s own internet-based service, Now TV, scheduled to launch in the summer, saying it would further add to consumer choice.
Laura Carstensen, Chairman of the Movies on Pay TV market investigation, said: “Competition between providers of movie services on pay-TV has changed materially and, as a result of these changes, consumers now have much greater choice. Lovefilm and Netflix offer services which are attractive to many consumers and they appear sufficiently well resourced to be in a position to improve the range and quality of their content further.”
The CC has also revised its views on the relative importance consumers attach to seeing recent movie content within a pay-TV movie service compared with other service attributes, finding that the range of content offered and the price are as, if not more, important than recency.
A Sky spokesperson said: “We welcome today’s revised findings. We have long argued that UK consumers are well served by strong competition between a variety of movies providers. We remain committed to innovating for customers so that we can make Sky Movies even better, building on developments such as Sky Anytime+ and Sky Go. At the same time we’re focusing on the launch of Now TV which will offer consumers even more choice in this vibrant sector.”
Although Sky currently holds the rights to the movies of all six major Hollywood studios in the first subscription pay-TV window (FSPTW), Lovefilm and Netflix have already acquired the FSPTW rights of several other studios (responsible for movies such as the Twilight series and the recently-released The Hunger Games) and rights to movies of many of the major studios in subsequent pay-TV windows.
The investigation into movies followed closely the Competition Appeal Tribunal (CAT) agreement in April 2010. At that time it was decided that wholesale rates be set for Sky Sports and Sky Sports 1 and 2 be offered to all comers.
