Ofcom Publishes Consultation On Pay TV Market
Ofcom has published a consultation document investigating the pay TV market following a submission from BT, Setanta, Top Up TV and Virgin Media in March (see Ofcom Launches Pay TV Investigation).
The consultation aims to get stakeholders’ views on Ofcom’s initial assessment of the market, which suggests that pay TV has delivered significant benefits to consumers.
At just over £4 billion, pay TV provides the single largest source of revenue to the broadcast industry.
However, the regulator added that there are some warning signs, such as areas where consumer choice may be limited.
Since the submission from BT, Setanta, Top Up TV and Virgin Media was made, these parties have provided a more detailed submission, which Sky has responded to.
The further submission said that competition in the UK pay TV industry is not working effectively and that there are features in the industry that prevent effective competition taking place.
However, Sky disputes this, and in response gave several reasons why it believes competition is effective and is delivering benefits to customers.
Some concerns over the pay TV market outlined today by Ofcom include: * Whether vertically-integrated firms have the incentive to make their premium content, such as sports and movies, available to other retailers and other platform operators; * Whether firms are able to compete effectively at the wholesale level for premium content; and * The enforcement of buy-through (the practice of requiring consumers to purchase a basic package before they are allowed to buy a premium service) at the retail level.
Ofcom’s investigation comes with Sky planning to launch a pay-TV service on the digital terrestrial television platform Freeview.
The pay-TV service, which Sky unveiled in October under the name Picnic, would see Sky News, Sky Sports News and Sky Three replaced on Freeview with Sky Sports 1 and, in the evening, Sky One (including an hour of Sky News content) and Sky Movies SD1 (see Ofcom To Look At Sky’s Pay-TV Picnic).
The regulator expects to publish a further consultation in next Spring.
Ofcom: 020 7981 3040 www.ofcom.org.uk