In a speech to the Broadcasting Press Guild, John Petter called on Ofcom to extend its Digital Communications Review to encompass the pay-TV market.
“We think it needs to address the pay-TV sector, specifically the lack of competition and poor treatment of customers in the sector. This is a long term problem which the current regulation just doesn’t address.”
Petter contrasted broadband, where there are multiple strong players and shares no higher than 32%, with pay-TV where Sky commands 64% of revenues.
BT’s multimillion pound entrance into the pay-TV arena has secured its broadband market with seven consecutive quarters of market leading growth.
Current wholesaling arrangements were inadequate, he said, arguing that sports fans don’t just want Sky Sports 1 and 2, but the whole package including Sky Sports 3, 4, 5 and the F1 channel. Petter gave the example of the 2010 campaign BT used to try and attract customers to the two available Sky Sports channels on his platform. Sky countered with an advertisement showing two pizzas, asking customers whether or not they wanted the whole meal.
But while Ofcom is able to set the wholesale price for the two channels, movies can be sold to NOW TV customers over-the-top for a cost less than the wholesale price given to pay-TV platforms. Petter also said rather than reduce prices when BT Sport launched, Sky had done the reverse.
Another BT target is the buythrough – a common practice in pay-TV – where customers are required to pay for basic channels before having access to the premium offer.
Sport is not the only fruit for BT. Its exclusive deal with AMC will see the channel debut for BT subscribers in the autumn – available to BT Sport viewers whether viewing over BT TV or Sky – Petter added that while he wouldn’t rule out the prospect of the original drama channel being added to Virgin Media homes who already enjoy the BT Sport channels.