BSkyB's Position in Pay TV Movies Scrutinised

The dominance of the UK pay TV market by British Sky Broadcasting has triggered another competition investigation. Communications regulator Ofcom has asked the Competition Commission to look into the sale and distribution of premium pay TV movies. Ofcom said it was concerned at the way movies are sold in the first run pay TV window and in about arrangements for the wholesale supply of pay TV packages including movie channels.

Although movie rights were covered in Ofcom's investigation in the UK pay TV market - concluded earlier this year - the regulator said it could not address the issue fully using its powers. The Competition Commission will now launch its own investigation, which could take up to two years.

Analysis
BSkyB has exclusive pay TV deals with all six of the major Hollywood studios which are used to programme its Sky Movies premium pay channels. BSkyB also buys subscription video-on-demand (SVoD) rights as part of its first window pay TV deals, which Ofcom notes that it does not fully exploit due to the restrictions of satellite broadcast technology. Ofcom argues that while consumers can also see recent Hollywood movies on DVD, VoD and free TV, these do not consistute substitutes for premium pay TV. Ofcom also argues that in buying out the SVoD rights, BSkyB effectively precludes competitors from launching a service which would compete with Sky Movies.