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Sky Movies Don't have a Monopoly

# 23 May 2012, 09:31 by cfteam

The Competition Commission has ruled that the arrival of Netflix and Lovefilm with their Pay TV internet based distribution services has increased consumer choice. Reversing an August 2011 provisional decision, it is now considered that Sky Movies do not have a material advantage over their competitors.

Streaming services provided by Lovefilm and Netflix’s are now considered to provide alternatives to the use of the Pay TV models linked to a TV subscription such as the satellite services of Sky or Virgin Media’s Cable TV. Sky themselves are soon to be launching a streaming service, Sky Now, which is expected to operate with an independent model to their satellite systems.

The movies competition assessment relates to the impact of first subscription pay-TV window (FSPTW) film services. Currently Sky Movies hold the rights to six major hollywood studios. Netflix and Lovefilm already hold rights to some other studios output. The Competition Commission appears to believe this will continue to spread as licensing agreements are renewed, but with the buying power behind Sky is this a valid assumption, even if the newer operators are well funded?

The Competition Commission’s ruling relates only to Sky Movies. It does not appear to consider the wider impact of Sky’s entire platform. The investigation has been limited by the original terms of reference which related to the impact of FSPTW movies. Cable Forum is left wondering if such a restricted remit was ever likely to achieve a meaningful outcome. The statement of Laura Carstensen, Chairman of the Movies on Pay TV market investigation that “Despite these developments, which are good for competition and good for consumers, we still believe that competition in the pay-TV retail market overall is ineffective” is perhaps telling.

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