The BFI (British Film Institute) has said it is “extremely concerned” at what it sees as a reversal of the Competition Commission’s provisional findings on the market for movies on pay-TV and has urged it to reconsider its position.
“It might be expected that such a reversal would be motivated by firm evidence of a fundamental change in competition in the market. And yet the CC’s decisions are based on the impact of two recent entrants to the VOD market, Lovefilm and Netflix; and on Now TV, Sky’s own over-the-top (OTT) service, which has not yet launched,” the BFI said in response to the Commission’s findings. “As it stands, the impact of these new services is very small, and it cannot be argued that they have had any substantial impact on the market for movies on pay TV. Lovefilm and Netflix have active subscriber levels that are far lower than those of Sky, and their future prospects are highly uncertain.”
Last month in a reversal of its original provisional findings, published in August 2011 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 found BSkyB no longer had material advantage over its rivals in the pay-TV retail market, the Competition Commission has found.
In its own response Netflix said it remained the case that while it competed vigorously against Sky for content none of Sky’s competitors currently have meaningful FSPTW [First Subscription Pay-TV Window] content from the major studios.
Even Sky voiced concerns of the revised findings, describing them as “almost entirely backward looking” and focusing on competition among traditional pay TV retailers. “The backward looking nature of the CC’s analysis of retail competition is particularly incongruous in view of the central role that developments related to OTT services have played in causing the CC to revise its view on the contestability of FSPTW movie rights.”
