Ofcom has launched a new consultation as part of its review of the pay-TV ‘wholesale must-offer’ remedy.
The wholesale must offer requires Sky to offer its Sky Sports 1 and 2 channels to external platforms at a rate set by the operator. It’s designed to give the consumer both choice and competition.
The obligation has been in effect since 2010 for Virgin Media (cable) and BT (digital terrestrial TV) while litigation has been on-going. In November 2014, it was extended to IPTV for BT.
Ofcom’s latest review launched in April 2014. In the intervening four years there have been a number of significant developments, such as the introduction of sports apps, and the launch of the ‘freemium’ BT Sport channels.
The regulator’s assessment indicates that Premier League and Champions League football are key content likely to be capable of influencing consumers’ choice of pay TV retailer. So part of the consultation will cover its view that limited distribution of this content may harm competition between pay TV retailers.
Sky currently holds over 75% of live rights to Premier League football and has more than 80% of market revenues from the supply of key sports channels. But the consultation is not just about Sky: BT now holds around 25% of live Premier League rights, generating between 10% and 20% of revenues, and has acquired all live rights to Champions League football from next season.
A second stage of the review will take place in 2015.
