BSKYB could soon offer pay-per-view Premier League games and movies to customers through their set-top box.
Broadcast watchdog Ofcom is expected to change the rules to allow the new venture this week as part of a massive shake-up of broadcasting laws. The ruling would allow Sky access to millions of homes that do not currently subscribe to its services and would represent a dramatic shift from the subscription model in place for most premium content.
The idea, code-named “Picnic”, was first proposed by Sky in 2007. However, Ofcom deferred its decision until it had completed an investigation into the pay-TV industry, finally expected later this week. Sky has indicated it could reach an additional 4m viewers through their set-top boxes.
But even if Ofcom allows the scheme to go ahead, it will be seen as scant consolation for the expected ruling that Sky will have to slash the wholesale price it can charge other broadcasters for the right to screen its premium services.
Ofcom may force Sky to cut its price for programming including Sky Sports 1 by up to a third.
Industry sources are already speculating that allowing Sky a pay-TV platform on Freeview is a sweetener for making it cut its prices. Sky has signalled it would challenge the decision in the courts.
Rival broadcasters are already considering ways to take advantage of the lower wholesale prices. Last week City A.M. revealed BT Vision director Tony Ball, a former Sky chief executive, raised the possibility of giving away Premier League games if customers sign up to BT’s broadband and fixed line services. Virgin Media is thought to be considering similar measures.
Both are desperate to chip away at Sky’s commanding lead in the subscription TV market. It has 9.5m customers, compared to just 3.7m at Virgin and 450,000 at BT.