Sky dominance not a problem says watchdog

SKY’S exclusive movie rights do not create a monopoly in the pay-TV market, the government’s media watchdog ruled yesterday, in a major victory for the broadcaster.

Despite Sky enjoying special deals with major Hollywood studios, the arrival of online streaming services Netflix and Lovefilm into the market has loosened Sky’s grip, the competition commission declared.

“Sky’s position in relation to the acquisition and distribution of movies in the first pay window does not adversely affect competition in the pay-TV retail market,” the commission said, in a reversal of a decision taken last year.

The case was re-opened to take into account the arrival of Netflix and Lovefilm as well as Sky’s Now TV offering, which offers an alternative to its satellite service.

The firm’s rivals hit out at the ruling. Virgin Media called it “extremely disappointing”, and BT said it “flies in the face of BT’s experience as a retailer” and that “consumers who wish to watch premium Hollywood movies are left with no alternative”.

Sky Movies enjoys exclusive rights on the first broadcasts from major film studios, but the competition commission judged that this was not enough of a factor to make Sky a dominant player in the market.

The watchdog said Sky Movies “is not a sufficient driver of subscribers’ choice of pay-TV provider to give Sky such an advantage over its rivals when competing for subscribers”.