sky movies (excess profits)
 

anyone see the article about sky movies making excess proffits ?

The Competition Commission has said BSkyB is making "excess profits" on its movie channels, increasing the likelihood that the company could be forced to change the way it does business with Hollywood studios and rival broadcasters.

Re: sky movies (excess profits)
 

Yeah, it's on Digital Spy. The bit that interests me is the way Sky lock away On Demand rights that thay can't even use!.

Linkage HERE

Sky is making "excessive profits" from its Sky Movies service, the UK's competition regulator has said, hinting at potential forthcoming reform of the pay-TV films market.

Re: sky movies (excess profits)
 

You should read the working papers it make for good reading ( all 20 of them ) It takes a while to get through them.

Re: sky movies (excess profits)
 

its about time something was done and hopefully sky get to reudce the price it charges to other broadcasters !

Re: sky movies (excess profits)
 

We in the UK will never have a truly level playing field for other pay TV operators until Sky are stopped from cornering the market, sports and movies are dominated by Sky giving the likes of VM and BT little chance of setting up rival services.
The fact that Sky lock away the ON Demand rights because they are not capable of using them can't be right...I'm sure these excessive profits won't stop Sky from putting their premium service prices up yet again.

Re: sky movies (excess profits)
 

another interesting quote from the article...

Re: sky movies (excess profits)
 

And the likelyhood that the Conservatives upset Murdoch......nil!

Re: sky movies (excess profits)
 

The competition commission is an independent organisation and as such the Tories have no influence over it's findings.

They can veto them but to do so would be a major thing that would cause them all sorts of problems that I doubt they would want.

Unlike Ofcom the CC can tell Sky to do what they want and it's legally binding beyond limiting what they can charge others etc.

They could even break Sky up if they want to ensure proper competition:shocked:

Here's hopping they do the right thing and at least take away Sky's VOD exclusives on movies.

Re: sky movies (excess profits)
 

I am 100% behind any investigation into ANY company charging too much for subscription TV services, or investigating any exclusivity 'lock in' periods with content

My fear is, like with the events with Premier League football, is that we will end up with yet another subscription service like we did with Sky/Setanta and end up being lumbered with another separate susbscription. It's never seems cheaper for the end user but seems to satisfy the competition people, job done for them.

I wonder how FilmFlex/Picturebox would react to yet another movie vendor being on VM like LoveFilm anyway?

We'll see.

Re: sky movies (excess profits)
 

There is always that risk, I agree. Competition should work in the customers favour, but as you say... we'll see. :)

Re: sky movies (excess profits)
 

Totally agree with the past few posts, competition should work in the customers favour. Personally I preferred when all football etc was on SKY Sports. All I had to worry about was 1 subscription, and everything I wanted to watch was in the 1 place. It's the same as the movie channels. Everything I want to watch is currently in my subscription. If things get broken up, and 2 or 3 different movie subscription channels are set up then I ain't going to be too happy.

Re: sky movies (excess profits)
 

When any media outlet prompts an investigation under the guise of getting a better deal for their own customers I doubt it always is, I think it's often just to further their own agenda. It's naive to think otherwise in my opinion. If we do benefit then all well and good but we didn't with Premier League football and I doubt we will with movies.

I remember all too well when some bright spark in the late 80's/early 90's decided ITV should be opened up and insisted viewers would all benefit and we ended up losing a wonderful broadcaster like Thames Television and 'benefitted' from the genius that was Carlton Television.

Be careful what you wish for.

Re: sky movies (excess profits)
 

Sky having a complete monopoly and charging too much for movies because of it isn't a good thing is it? Suggesting we customers shouldn't wish for something better is just what Sky wants.

Re: sky movies (excess profits)
 

In theory of course it isn't.

But exactly the same was said regarding Premier League football and all that happened was we had to subscribe to Sky and Setanta, and sadly it was later proven two separate services were unsustainable. People don't seem to want multiple subscriptions.

If you want yet more separate subscriptions that will probably cost more then support these moves to the hilt, that's your choice.

I would prefer for Sky's prices to be reviewed not so much their exclusivity, making them understand that exclusivity comes with responsibility. Having packages here, there and everywhere dosen't seem to benefit us financially.

Price regulation of movies might though.

In my opinion.

Re: sky movies (excess profits)
 

So long as this and the other regulatory actions on both Sky and BT are taken as part permitting News Corp to get their hands on the other 61% of Sky, and that Virgin's network is opened up on an active and/or passive level I'm cool with it.

Regulation of unbalanced markets is just fine so long as it's not unbalancing them the other way.

EDIT: We have one of the best pay TV packages anywhere, it's also one of the most expensive. There is always a concern however that we the customer will suffer in terms of quality of services in return for receiving them at a lower rate, just as happened with the highly regulated broadband market.

Re: sky movies (excess profits)
 

Why should cable have to open up it's network? They built it paid for by themselves. It's theirs end of story.

Sky buying up VOD rights that it can't use is the major issue here. They effectively act as a cock block for technology development because their system can never sustain any significant VOD. The whole purpose of them buying it is to stop anyone else doing it. That's anti competitiveness in a nutshell and will be stopped imo.

Re: sky movies (excess profits)
 

Indeed, this is why I said we should be careful what we wish for.

You don't always get the desired end result.

---------- Post added at 10:28 ---------- Previous post was at 10:25 ----------

Why can't Sky use the VOD content they have bought up? Genuine question.

BT Vision seems to manage perfectly well, I had it before VM and it was just fine.

My brother is using Anytime+ on Sky and says it isn't bad at all, there's a bit of delay when loading but they certainly seem to be using their content.

Re: sky movies (excess profits)
 

Same reason Sky are obliged to resell the content they purchase. Who paid for it is nothing to do with it. If we went down that route BT would have every right to refuse to resell any infrastructure built since privatisation and Sky would have no obligation to offer EPG space. As it is BT are obliged to resell their new NGA portfolio and even greenfield areas, built exclusively with private funds, carry the exact same obligations on open access as brownfield areas built pre-privatisation.

It doesn't work that way, who built / pays for the stuff isn't the issue, but it's the usual argument given when people all too keen for BT to open up their network and Sky to open up their content and delivery platform are confronted with the prospect of Virgin Media being forced to actually give some regulatory concessions instead of just lobbying for them on others.

Fairness goes both ways, Virgin have been beneficiaries of regulation for quite long enough.

As a last example Virgin have over 50% penetration in their passed areas, however because they only cover about 50% of the country they are judged not to have significant market power in the areas they pass. Rather than taking their coverage within their own areas their coverage is taken a as percentage of the entire country. That's how tenuous the arguments are to try and keep VM free of regulation, makes no sense as all. Kingston Communications cover 100% of Hull and 0% of anywhere else and have SMP in Hull, VM should by any sensible definition be adjudged to have SMP in their own areas however the definition is applied differently depending on the operator in contravention of the rules as they stand.

EDIT: Here you go - http://www.cableforum.co.uk/board/35129429-post14.html

Re: sky movies (excess profits)
 

god and here was me thinking we live in a capitalistic society. Sky only make so much cuz people are prepared to pay for it. The consumer has a right to vote with its feet and if enough did they Sky would have to change or go out of business

All these independant bodies and enquires only end up costing us anyway

Re: sky movies (excess profits)
 

Sheesh whatever made you think that?

I gave up on that train of thought a while ago, hence reluctant acceptance of the regulation so long as it goes both ways, which it rarely does.

Re: sky movies (excess profits)
 

A couple of problems with your argument.

Firstly Sky with movies and sport are a monopoly and without intervention from Ofcom etc there would be no compitition from anyone else. They have to do certain things like have open epg etc as part of getting a licence to transmit signals.


As to BT and VM etc, BT's network was almost completely paid for by us, the taxpayers prior to privitisation, thats why LLU went through and wholesale available for others to supply ADSL etc.

BT's new network is under the same rules as for the rest of its network so should be open for others to get wholesale. Plus they are getting / applying for grants etc to help rollout like the millions they are getting to sort out Cornwall and Wales.


As to VM, the network was paid for by private companies and is their property. Or d you think I should be able to park my car on the drive of any private house or that I could just go to any business and be able to demand access to their equipement just because I want to.

Tell you what, give us your address so we can come round any time we like and use your stuff and I will accept that you believe in universal access. :D

---------- Post added at 11:22 ---------- Previous post was at 11:20 ----------


But no point in doing so unless you live in a VM area or if BT Vision good enougth for you. ;)

Re: sky movies (excess profits)
 

Sky have a monopoly on Sports do they?

News to me. That little piddly organisation called ESPN may well disagree, and the European Commission. Barclays Premier League, Clydesdale Bank Premier League, Europa League, FA Cup, Aviva Premiership and on and on but of course it attracts a separate subscription. Not to mention Formula 1, NPower Football league, FA Cup, UEFA Champions League, Carling Cup, 6 Nations, Horseracing, The Open, Wimbledon etc etc on terrestrial amongst many other sports.

And what about Filmflex, Picturebox, BT Vision PPV movies.

It's EVERYONES prices that need looking at in my opinion.

Re: sky movies (excess profits)
 

A major problem with your entire post, just like VM you want it both ways. You want to be able to claim private money built private networks so shouldn't be opened up then you want to scream monopoly.

You want to highlight how Sky monopolise content and raise the barriers to entry while ignoring how high the barriers are to entry should anyone decide they want to compete on similar terms to Virgin Media - they are far higher.

You comment on BT building their new network and it being subject to the same restrictions as their publicly built network but don't actually say why beyond mentioning the public funding they are receiving in Cornwall. Outside of Cornwall and other areas where some public subsidy is being provided where's the case to force open access?

Ebbsfleet and all other BT new builds are required to be open access yet BT are the only company that would have this restriction applied, VM could be the sole provider of TV / telco / broadband services and don't have to open up their network.

Where people are barred from putting up dishes people have a choice of VM or BT Vision, yet it's perfectly fine for VM to keep their network closed even in this case. Why?

You can't have it both ways. Either regulation is fair and applies to everyone evenly or it's arbitrary. The constant ignorance of those cases where VM hold over 51% of the retail and wholesale (to themselves) markets while coming down hard on Sky and BT are arbitrary - there is a perfectly reasonable case to regulate both, even Europe are pursuing it, yet the regulator here constantly turns a blind eye despite being ahead of the rest of Europe with regulation of BT and Sky.

The other odd comment focuses on how regulating Sky Movies is good for the consumer, so should be pursued. Surely mandating access to Virgin Media's network, allowing others to offer differentiating products or reducing the barrier to a third party deploying FTTH/B, is also a good thing for the consumer?

It's really quite perverse how many people are pro-consumer when it comes to Sky and BT but get defensive when it comes to Virgin Media. Let's get those ducts opened up and see who comes to put some glass to our homes - think of what an effect on our market a real fibre optic network will have.

Re: sky movies (excess profits)
 

I don't think you can pull the "monopoly" card on Virgin when it has massive debts because of the cabling they did. If they were making huge profits you might have a case in the future. Virgins cable IS their business however.

Re: sky movies (excess profits)
 

You know what I meant with my post about the monopoly bit.

For most people if you want certain sports you need Sky sub or you are limited to whats available, ESPN havn't been around long enough to really have an impact but may in the future.

Sky have for years been buying up all the premium content on sports they can and have done the same for movies, its why they are on the rate card so have to be sold at a reasonable rate in comparison to what they charge their own subscribers.

What we really need is for Sky to be broken up into content and provision with content having to treat all customers equally on price and access.

BT should have the same with infrastructure and provision seperate with all having access to BT network for the same price.

You could then have an argument for VM being the same, until that then opening up VM to others will put them at a disadvantage especially to Sky who have no infrastructure of their own beyond LLU that anyone else could access.

---------- Post added at 13:48 ---------- Previous post was at 13:41 ----------


Simple answer is BT network was built with tax payers money and so why shouldn't we have access.

As to Ebbsfleet etc they signed the deal, if they didn't like it they didn't have to.

And what is pro consumer allowing Sky to get access to VM network and selling BB at a loss like they do now on BT network leaving VM customers with a poorer service due to contention issues.

If others want a fiber network like VM then do what they did and BT are doing, build your own.

Lastly if public mone is used then access should be granted to the network. Or do you want to pay for something you can't use, I don't.....

Re: sky movies (excess profits)
 

All Pay TV rights holders need to have their prices investigated, and if need be regulated. There's no doubt about that.

To me as a end user it matters not one jot who holds the rights so long as they are not abusing their position and overcharging. I don't have a view on the platform/content argument other than any change in rules should apply to everyone, not just Sky.

What I don't want to see is us having to obtain multiple subscriptions which will surely end up costing more.

Re: sky movies (excess profits)
 

Oh I see, so being a monopoly is fine so long as you accumulated debt to get there?

The law and every other definition of a monopoly disagrees. Financial state is totally irrelevant to monopoly status. Virgin's debt is more than manageable according to their financial results.

Also of note is that a proportion of Virgin's debt is due to the acquisition of Virgin Mobile, most of the debt from acquisition of cable franchises. That's what the cost was, not the construction of them but overpaying on acquisitions, and most of this was wiped off in debt for equity swaps by ntl and Telewest.

Bad business decisions and being the poster child for the .com boom does not a company immune to monopoly status make.

Re: sky movies (excess profits)
 

How can VM be a monopoly when Sky and BT are available to almost everyone in the areas they cover ?

You are a monopoly if you are the only one available.

Re: sky movies (excess profits)
 

While it's fine for VM to remain vertically integrated and take advantage of Sky's content and BT's network to reach outside their passed areas. How very fair.

I see no disagreement here.

They had no choice in the matter due to regulation.

The more I read this the less it makes sense. So Sky making consumers pay less for broadband is anti-consumer?

Sky's broadband network doesn't affect other consumers using BT capacity nor should it affect those of VM customers. Why would Sky choosing to take a loss on wholesale access to cable cause VM issues so long as VM price the wholesale package appropriately?

Why would passive infrastructure access cause VM customers issues?

We're into one rule for one, another rule for others territory there. By that token it's anti-consumer that BT Wholesale should have to sell to anyone apart from BT Retail as other ISPs are consuming bandwidth and reducing the amount available for BT Retail which is of course a ridiculous argument.

If Virgin Media want access to the content Sky have they can do what Sky did, buy their own.

Barriers to obtaining that content are far lower than those of building a rival cable infrastructure to Virgin Media yet you seem to think it's absolutely appropriate that Sky are forced to sell their content at a regulated price and that indeed they should be separated to ensure equivalence of access to this content due to Sky's financial resources.

If we are playing the game of barriers to entry they are far higher for cable than for Sky's content deals, that's a total non-starter.

I pay for many things I can't use though that's not really the issue here, no-one said that BT should keep their legacy network to themselves, it is however a perfectly valid question why BT should have to open up services that are not taxpayer funded and why Sky should have to resell at regulated rates despite not receiving any money from the taxpayer while VM get to keep their network at passive and active level to themselves.

If we are opening up their rivals' networks at active and passive level and regulating wholesale content prices it seems to me that all the regulation is favouring one party which isn't the point, it's supposed to be favouring us as consumers.

Re: sky movies (excess profits)
 

VM has their network built primarily by Telwest and NTL. However if anyone else wants to start a cable network up they are able to do so.

The key is tax payer money, BT have always had and always will have an advantage that they started as a national company. They would not have the network they currently do were it not for the taxpayer.

I've said for a long time the flaw with sky has always been they control both content and infrastructure. Originally when you got a sat dish and box you could see all the sky channels and european channels. In theory you could get a card for whatever you wanted (eg canal+ sport). However now sky block you from seeing anything else, although the signal is there without a separate box/dish. The current model of sat provision isn't what was originally envisaged, the question is will the EU make them open it up.

I really do think you should be allowed to subscribe to both sky and EU channels should you wish, on one box.

TV provision in this county is screwed up.. we pay extra for HD.. seriously why is it more for HD. Why indeed do we have separate channels? All channels should just be HD and the box outputs whatever you're TV is capable of watching. There is no need for separate channels other than to charge extra for HD.

Re: sky movies (excess profits)
 

How many cable operators are there?

Given we're ignoring roughly equivalent services to define monopolies.

---------- Post added at 15:01 ---------- Previous post was at 14:59 ----------

Likewise anyone is free to bid on the content that Sky show via their Movies and Sports channels if they wish to do so.

Re: sky movies (excess profits)
 

The point is not how many, the fact is if you wanted to cable a new area of any town tommorow and were willing to spend the £ you could do so, there is no monopoly. Sky could start cabling streets if they wanted.

Re: sky movies (excess profits)
 

That is a very valid point indeed.

Re: sky movies (excess profits)
 

Just as Virgin or BT or whomever else could start buying content rights if they were willing to spend the £ yet Sky are being told to drop Wholesale prices.

Re: sky movies (excess profits)
 

Yes but Virgin are purely a platform for delivering content to consumers whereas Sky are the content and platform for delivery. It is therefore in their interests as a company to provide and deliver what they can. There is the argument that owning the content and having the backbone to deliver it can be seen as anti-competitive.

Re: sky movies (excess profits)
 

Very odd to see some posters jumping to Sky's defence here. The competition commission has said that they are overcharging us customers. Should we think that is a good thing? Bringing VM in to it is just trying to put up a smoke screen. If they are doing the same then the competition commission should investigate them as well. The fact they aren't is for a good reason I believe. In fact I think VM's network was previously investigated an found not to be any threat to competition for obvious reasons.
Now back to why a few posters are supporting Sky on this. Why would they? Sky are overcharging us. If a customer posted that VM was overcharging him would we just tell him that's hard luck.
One poster above uses the excuse that we are in a capitalist society. What a strange defence. The whole thing about a capitalist system is that competition is meant to be a good thing. That is why we have a competition commission. The fact is that we should be thankful there is a competition commission and instead of criticising we should be defending our own consumer interests. A system free of competition is a communist one not capitalist.
There are two things they could do to stop us customers being ripped off. They could force Sky to reduce prices. Or better still they should make it so that there were no exclusive rights on movies and then we could see companies like Amazon/Lovefilm coming in to the frame. I don't see why the same movies can't be available from different companies, ondemand for instance, then we will have choice and the prices would drop.
I think a bit more consideration of our own interests and a lot less for a big company operating a monopoly and ripping us off are in order here.

Re: sky movies (excess profits)
 

Please understand I'm not leaping to Sky's defence I just find the regulation horribly one-sided. It seems right now that UK regulation is geared towards providing Virgin Media content at regulated prices and access to 3rd party physical infrastructure to extend their platform to deliver that regulated price content while ensuring they can remain fully vertically integrated.

Regulating Sky's retail prices is strange, people either pay it or not and that's capitalism at work, regulating Sky's wholesale prices is more debatable given the relatively low barriers to acquiring that content and reluctance to open VM's platform.

I just want to see regulation applied equally, either light touch to all or heavy regulation to all, unsure what's wrong with that?

Re: sky movies (excess profits)
 

Do you think then that the competition commission is biased? They are investigating Sky for a good reason and have come to a very definite conclusion. Sky are ripping us off.
Do you think it would be a good thing for instance if we could only buy dvd's from HMV? I know that isn't an exact comparison but as near as I can get. Would that situation be tolerated. Don't you think that HMV would put their prices up and start ripping everyone off? Just like Sky are doing.
I think we customers should be looking for answers not just accepting the status quo which clearly isn't working in our interests.

Re: sky movies (excess profits)
 

Have you seen the composition of Ofcom and compared it along its history to people who've worked in cable companies?

If Sky are ripping people off and they feel they're being ripped off no-one's forcing them to pay for Sky Movies. If you aren't happy with the price of the product don't pay it. If others feel Sky are profiteering excessively there's nothing stopping them from paying for content just as Sky do and charging slightly less. if there's so much profit there there should be plenty of scope to undercut. That's how things used to work anyway.

Regardless as I said if regulation is felt necessary so be it, so long as it is applied fairly which imho it isn't. YMMV.

Re: sky movies (excess profits)
 

But the point is, there isn't the choice for the customer and therefore we have to pay - whatever Sky decide to charge. That's what they are trying to stop - overcharging for a service only they can supply.

Re: sky movies (excess profits)
 

Ignition I know you are an highly intelligent guy and I shouldn't need to explain about monopolies and why they are a bad thing. The fact is that if you want movie channels you have one choice, take it or leave it. If there were two companies providing them they (the companies) would have to compete on price. Sky dont have to do that. Saying that customers can just not pay the inflated prices means that they have to do without the product.
One thing you said as well that I must take issue with is where you say there is nothing to stop other companies buying the content. They can't. Sky have so much money compared to the others that nobody can compete. Sky would always outbid them and sky make sure they have exclusive rights.

Re: sky movies (excess profits)
 

Refusing to pay overinflated prices is how companies realise the market won't tolerate their pricing. Premium pay TV isn't essential, no-one is obligated to purchase it, clearly people tolerate Sky's charges as they do pay them.

The question of money is an interesting one. When it comes to the issue of VM's total integration within their closed cable network the answer to competition is 'build your own' which would cost a 11 figure sum. When it comes to paying less than £300 million to compete with Sky's content purchasing power no-one can compete.

Have a look at both VM and BT's balance sheets, pay special attention to the cash they are generating. They have both chosen not to invest in content and indeed VM have actively left the content space. Seems pretty ridiculous to choose not to invest in content then complain when a 3rd party buys it all and won't sell it to you for what you want to pay for it, however having a friendly regulator is always a bonus in those circumstances.

---------- Post added at 17:41 ---------- Previous post was at 17:37 ----------

I wasn't aware we were required to purchase Sky's premium content. There are many products there is only one supplier for, there is nothing stopping other operators from purchasing these content packs they have just chosen to not do so.

---------- Post added at 17:43 ---------- Previous post was at 17:41 ----------

Regardless this regulation is fair enough, again I didn't say I was opposed to it, however I am completely opposed to regulation that isn't even handed, and again IMHO VM should be made to offer some concessions in return for access to BT's passive and active infrastructures and regulated access to increasing amounts of Sky's content.

I want to see VM's passive infrastructure opened up to 3rd parties just as BT's is. If VM are going to be getting Sky and BT's infrastructure and content time for it to go both ways.

Re: sky movies (excess profits)
 

Having a friendly regulator? This is sheer fantasy. The competition commission is their as an independent body to promote fair competition. Because they have found the obvious ie that Sky are in a position of dominance and are running a monopoly to the detriment of us customers then of course they must be in VM's pocket.
The last time I looked the prime minister was David Cameron and he was spending his christmas with James Murdoch not any executives from rival companies.
You you know fine well why VM have got out of the content busines it is because they cannot compete with Sky. I'm not looking for protection for VM anyway I'm looking for our interests to be protected and a monopoly is not in our interests.

Re: sky movies (excess profits)
 

I was referring to Ofcom who are clearly cable friendly - remind me again who referred this to the Competition Commission?

I agree, so let's have 3rd parties getting access to VM's network so that those who are unable to receive reasonable broadband speeds from other operators have a choice of providers and altnets can use both VM's and BT's ducts to deliver fibre to premises and buildings.

Re: sky movies (excess profits)
 

So basically you agree with my argument then and if opening up VM's network works in our interests then I am in favour. That is really for another thread anyway and a different CC investigation and is off-topic in this thread. This thread is about Sky running a monopoly and ripping people off. Something I thought we would all be against. I suspect that what you are proposing would weeken a Sky competitor and move us closer to a total Sky monopoly though which isn't in our interests. But perhaps the competition comission shouls investigate. Until it does it's a red herring.

Re: sky movies (excess profits)
 

I've no interest in weakening a competitor to Sky and have little interest in this decision as it stands, my irritation is in how one-sided the ongoing regulatory work in this space is. It's all about opening up Sky and BT's content and networks with no concessions being asked for or given by the company that supplies half of all pay TV and broadband services to half of the country.

It's the inconsistency which is the irritation.

Other than that I'm fine with Sky being pulled up for overcharging, don't misunderstand me, Sky are at heart a brutal, soul-less money-making machine, same as pretty much every other company of any size :)

EDIT: With this in mind I've asked my MP about the situation although this whole thing is a bit of a sore point with him I suspect :)

Re: sky movies (excess profits)
 

:Yikes:

Sky 10 million TV customers, Virgin Media less than 4 million, factor in other Pay TV suppliers and how does Vitgin supply half ?

As to BB according to http://www.ispreview.co.uk/review/top10.php the numbers are

BT Retail (PlusNet, Brightview) 5,529,000

Virgin Media 4,242,900

TalkTalk Group (AOL, Opal, Tiscali) 4,224,000

Sky Broadband (BSkyB) 3,006,000

Orange (Everything Everywhere) 795,000

O2 (BE Broadband) 663,800


Once again hardly half...........


:redcard:



:naughty:

Re: sky movies (excess profits)
 

Care to try reading that again, in between the gloat-fest? :)

The company that supplies half of all services to half the country.

50% penetration in serviced areas which are approximately 50% of the country.

Fixed line penetration in the UK is about 65%, Virgin pass about 12,600,000 homes.

Virgin listed their broadband cable customer base at the end of the previous reporting quarter as 3,969,000.

As of last quarter Virgin were 130,000 short of the 50%, assuming that uptake of broadband services is equal within and outside their passed areas and all their passed areas are broadband capable. At current growth rate they'll be at that 4,095,000 to get the 50% within 6 months. This being 50% of 65% of 12.6 million.

I hope this makes things clearer.

Re: sky movies (excess profits)
 

If Virgin have to open up their cable then Sky should open up their EPG! :)

Anyhow, why are we talking about Virgin when the thread is about Sky's excess profits? Shouldn't this be discussed on another thread?

---------- Post added at 09:39 ---------- Previous post was at 09:33 ----------

"Monopoly - Market situation where one producer (or a group of producers acting in concert) controls supply of a good or service, and where the entry of new producers is prevented or highly restricted. Monopolist firms (in their attempt to maximize profits) keep the price high and restrict the output, and show little or no responsiveness to the needs of their customers."

This is NOT what Virgin are doing by keeping control of their own cable - but IS what Sky are doing with the movie content!

Re: sky movies (excess profits)
 

Bolded bit especially is why VM is not and never will be a monopoly, and why the broadcast side of Sky could never be a monopoly.

Anyone can build a cable network, just plough money into it and build your network. If VM's network (like BT's) reached every home in the UK and was therefore cost prohibitive to build (due to the cost of reaching rural areas where there's limited scope to recoup costs) then it'd be a monopoly, but as it stands it only passes areas that would be deemed as financially viable to replicate.

The reason Sky is a monopoly is because the channel side of their company is highly restrictive to enter, exclusivity deals (with staggered end dates so outbidding on rights is a difficult thing to manage with making sure you get enough content to make the channels viable) being a huge part of that.

Re: sky movies (excess profits)
 

Sky's EPG is open, this is enforced as part of their operating licence.

---------- Post added at 10:21 ---------- Previous post was at 10:05 ----------

Given that Virgin Media's predecessors both went through bankruptcy protection and debt for equity swaps this is debatable and within VM's passed areas there is no way that replicating their network could be done financially viably as the market is saturated. To be viable a new entrant would need to capture nearly half of the customer base in the area. The penetration of altnet services in Europe is sub-20% and price pressures are heavy right now.

This same argument could be applied to BT in areas where they overlap Virgin Media, and to an extent is, however this only applies to the charges BT are allowed to levy in the areas all open access obligations remain.

Regardless being a monopoly isn't the issue, the question is one of Significant Market Power.

Do Sky have SMP within Pay TV - yes, which is why they are regulated.
Do BT have SMP - yes, which is why they are regulated.
Do Virgin Media have SMP - within their passed areas clearly yes, however Ofcom side-step this by taking their market share nationwide.

Kingston Communications have regional SMP while VM don't. There are a number of contradictions however cable has been favoured since its conception.

Re: sky movies (excess profits)
 

Do you think it's because Ofcom want a strong competitor to Sky and if they allowed others to use VM's network, this may water down VM's market share?

Re: sky movies (excess profits)
 

I have no idea what Ofcom want, you'd need to ask them that. :)

Re: sky movies (excess profits)
 

Just putting it out there :D

Might be the reason they don't regulate VM.

Re: sky movies (excess profits)
 

More the point, Virgins exclusivity on it's own cable is not stopping or restricting other companies from being able to do business.

Re: sky movies (excess profits)
 

The definition of monopoly applies to all forms of that product and not just one variation of it. Correct me if I am wrong (as I don't watch movies) but movies are still available through rental operators and through the Sky channel (which is available on VM and therefore covers the pay tv market) and prior to this it was available in cinema.

Sky isn't withholding content from anybody with regards to movies. I suspect this whole investigation has more to do with it being the right time to knock Sky than to do with movies as Sky offer a comprehensive movie service which is actually excellent VFM to the customers.

Re: sky movies (excess profits)
 

It may be "open" but the EPG queue has been closed for a long time now due to limitations with their SD boxes channel capacity.

I don't disagree that in areas passed VM have a very strong footing, however if this translates to SMP in those areas isn't quite as black and white.

SMP would mean that in those areas they can dictate terms, but we don't see them able to do that. That Sky can continually withhold channels from them shows that VM's MP isn't that significant. On a region level for broadband you can easily argue that it is, but for TV the situation is far more difficult to judge.

I think VM gets away with it's SMP on broadband due to it lacking SMP on TV, when you look at the company as a whole you can't say that VM has SMP, but when you break it down into the individual components (TV, phone, BB) then you can easily see signs of SMP.

So is having SMP in one aspect of your business enough for regulation? Apparently Ofcom don't think so.

Re: sky movies (excess profits)
 

I have now had chance to read quite a bit of OFCOM's and the CC comment's regarding the investigation of Sky's movie deals.

It seems it centres on the fact that Sky (as has been acknowledged) have invested heavilly and taken immense risks. It further seems that those risks were largely taken in the past, the debt is now paid back and (perhaps) outweighed by the level of profits they are making now and not just in sports broadcasting and that's why it is now felt it is time to have a look at the movie deals. So long as there is no witch hunt that seems fair enough to me.

However regarding VM opening up their BB network we may well find ourselves having a similar conversation when they finally get out of debt too. They have taken risks too and when those risks are finally bearing fruit I have no doubt they will be looked at in a similar way to Sky as indeed they should, they are both after all private companies. Once they are debt free and have been for a while I wouldn't be one bit surprised if they are told to allow others access to the infrastructure.

Re: sky movies (excess profits)
 

Just to resurrect this thread I was interested in this so asked my MP, he has written to Ofcom indicating I present some good points and asking them for an explanation of the discrepancies between the regulation of VM, BT and KT.

Re: sky movies (excess profits)
 

Shouldn't the real question be why Sky tv is regulated at all?

Re: sky movies (excess profits)
 

I thought this thread was about Sky Movies (excess profits), seems to be an awful lot about consistency of regulation....

What I found interesting in the original article was the inference that Sky are effectively withholding VOD rights at wholesale prices to first-run movies, even though technically they could make them available. If this is true, its clearly stifling innovation in this space and the reason why have no Netflix/VUDU type service.

Hopefully, Ofcom will sort this out so a *friend* doesn't have to have a VPN/Entropay card ....

Re: sky movies (excess profits)
 

Yes they are, they are buying VOD rights which they can not use so no one else can have them.

Re: sky movies (excess profits)
 

Show me a link that fully backs this up ? They have VOD rights for movies and use them on Sky Player and Anytime service.

Re: sky movies (excess profits)
 

Sky having the rights to VOD doesn't stop people who do not have Sky from watching that movie. The movies can still be watched by anyone that wishes to do so, just not VOD so that isn't really withholding the content.

Anyway Sky already offer movies on demand don't they? There is another thread on here where members have said Sky Movie subscribers also get movies on demand?

Re: sky movies (excess profits)
 

Yes they do

http://skyplayer.sky.com/vod/page/default/home.do
http://www.sky.com/shop/tv/anytime/
http://www.sky.com/shop/tv/anytime/what-can-i-watch/

Re: sky movies (excess profits)
 

This for Ofcom may help.... I found this by googling "Sky VOD rights", and it was the fifth item on the page (the third item referred to it).

The truth is out there.....:D

Re: sky movies (excess profits)
 

It's called future proofing and it's unfair to say they don't use it movies are delivered by anytime every night and available on anytime+ and sky player. It's sometimes an all to easy get out to blame the entire world on Sky I'm not there biggest fan however they have run it well as a business.

Re: sky movies (excess profits)
 

You may think that - OFCOM believe differently......;)


(you call it future-proofing, they call it anti-competitive....)

Re: sky movies (excess profits)
 

So they are available to you, there's nothing stopping you subscribing to Sky unless you cant have a dish that is.

---------- Post added at 15:20 ---------- Previous post was at 15:19 ----------

Is the VM network open to other companies like BT's ? Some would say that's anti competitive.

Re: sky movies (excess profits)
 

No it's not. it's stopping anyone else offering a service that they can't deliver.

The document is worth a read

http://stakeholders.ofcom.org.uk/con...ytv/statement/

The Competition Commision is looking in to this area. If they were offering the movies to their own customers, then that would be ok, but they don't.

---------- Post added at 15:22 ---------- Previous post was at 15:21 ----------

But VM are offering a service on their network, not keeping it closed and not using it, so that's not relevant to this.

Sky are brilliant in what they do and give to their customers, but some of their practices are very questionable.

Re: sky movies (excess profits)
 

We'll see what happens sooner rather than later , my point is they do use movies over video on demand.

Re: sky movies (excess profits)
 

Thats no Video On Demand though is it?

Whats that got to do with it?

Re: sky movies (excess profits)
 

Sorry but it is a closed network , no other company can use it.

---------- Post added at 15:25 ---------- Previous post was at 15:24 ----------

How is anytime+ not on demand.

Re: sky movies (excess profits)
 

My brother has broadband with AOL which is supplied on Virgin Media cable - so they do actuarily!

Re: sky movies (excess profits)
 

This is going way off topic :notopic:

Re: sky movies (excess profits)
 

What dial up their BB isn't.

Re: sky movies (excess profits)
 

So you are happy that Sky with hold VoD rights so the likes of LoveFilm, Netflix, Amazon and other on demand operators can't offer a possible cheaper service?

Even if they don't use them on their own platform?

seems crazy to back Sky on this one..

Re: sky movies (excess profits)
 

Yes i agree that it has gone way off topic and it is starting to come back on itself now ( as the laws of physics can not figure out how far:D:D:D )

Re: sky movies (excess profits)
 

he he :D

Re: sky movies (excess profits)
 

And why should they be able to use it ?

BT also cover all they areas VM do so broadband available, free view, freesat and sky already cover the same area so TV covered.

What do VM supply that is not available from others purely because they supply it.

Therefore this is completely beside the point.


Sky having tied up VOD rights since the start has blocked others from offering a service, why do you think Lovefilm has such a small VOD selection ?

Re: sky movies (excess profits)
 

In regards to the rights of the SVOD rights and SKYS profits, any body that has not read them they may need to read the working papers from the Competition Commission ( they are eye opening )

Link to the working papers:

http://www.competition-commission.or...ing_papers.htm

P.S They take a while to get through?

Re: sky movies (excess profits)
 

Like I say time will tell.

Re: sky movies (excess profits)
 

Anytime+ limited to Sky Broadband, so not only do you have to have Sky Movies you need Sky Broadband as well ....

Do any of the Sky defenders on here think that Sky is withholding/making Movie rights prohibitively-expensive wholesale to other service providers? I would suspect most would say they are but would argue they are available VOD via Sky Player/Anytime+ (with a Sky TV/BB subscription)

Now do they think this model is better/more-customer orientated then the US market of Netflix/VUDU/Redbox/Amazon etc. (Note: VUDU/Netflix is now 1080p/DD+) which is TV/BB-agnostic? If so, I'd be interested to hear your reasonings....

Re: sky movies (excess profits)
 

I'm not familiar with the US models but I also think that US models do not take away anything from what Sky are doing. Sky are offering an excellent service in the UK market.

Re: sky movies (excess profits)
 

How dare you say that on here LOL .

Re: sky movies (excess profits)
 

Haha!

Re: sky movies (excess profits)
 

Point is, it could be better now .... Sky are deliberately holding the process up until BT Infinity penetration increases so as to maximize commercial advantage ... at the expense of customers (well some, there's more than one way to skin a cat).

Re: sky movies (excess profits)
 

That ignores the fact that Sky already have the capability to offer this service through its own platform.

Plus what we are talking about here is competition to Sky that is growing rapidly, e.g. Most of the VOD service wannabe providers such as Lovefilm are growing so quickly simply because they buy any bright spark that wishes to compete. VOD is probably in its infancy as a mainstream service in the UK. It will probably become more than just VM, BT Vision and a handful of comprehensive catch up sites soon. The competition is yet to, IMO, really take place. Organisations such as Amazon or Youtube could compete if they wished to.

Which is why I really do wonder why regulate Sky? In the end an organisation must step up to Sky and compete or otherwise Sky should continue as it is. Anything in between is just nonsense as it costs the consumer in the end.

Re: sky movies (excess profits)
 

All I have to say is what happens when the movie studios want to set up there own SVOD? As a few have done already?

http://www.epixhd.com/ Is done by Paramount, Lionsgate, and MGM

FILM FLEX Sony, The Walt Disney Company and FILM FOUR.

What will happen if the other studios decide to do the same?

Re: sky movies (excess profits)
 

There are two that are much bigger than Sky and who the studios will find hard to ignore.

Amazon who have bought Lovefilm could flex its muscles and go for more VOD content.

Google have $100 million put aside for VOD to set up a service on youtube that will launch in the UK first.


Either of these can really break Sky's hold on movie VOD, especially Amazon who provide the studios with masses of money from DVD sales etc.


It would be easy for Virgin to have aps for these on TiVo as well as people using them direct via computers etc.

Re: sky movies (excess profits)
 

So why aren't they making it available? Why don't they make Anytime+ available on other ISP's?

You really think that Sky won't try to use/abuse its dominant position as movie/TV content rights holders to prevent others getting in on the action?

See above re: dominant position ...

Re: sky movies (excess profits)
 

SKY will try anything to try and dominate the market to their favour. You are able to see this with SKY ATLANTIC ( taking HBO on demand off of VM ). This is my opinion and i have to say that if you do not agree id do not give a castlemaine xxxx:D:D:D:D

Re: sky movies (excess profits)
 

Spot on, as you say Amazon and Google are making noises about going all out on subscription VOD this year starting in the UK, that will blow the market wide open. I don't think Sky will have the option of buying all the rights up for much longer, two bigger fish have jumped into the pond.

It's also worth pointing out that Sky aren't necessarily only under investigation for the effect of their exclusive movie rights on customers but on the movie studios themselves. Sky are using their power to pressure smaller movie studios into selling the rights at below market value thus cutting them out of the profit.

Re: sky movies (excess profits)
 

I think Sky should be made to give VM everything for free , make no operating profit and then pass their 10 million customer base over to VM for free LOL :-)

Re: sky movies (excess profits)
 

Anytime+ is available for people to use should they take up the service. It is not uncommon for companies to bundle their products. It is up to Sky how they deliver the product. If they wish to bundle it they are within their rights just as much as BT is to bundle its tv within its own products.

How can Sky abuse their position exactly? Its an open market. No content provider cares if they sell to Sky or someone else as long as they get the best return. Like has already been mentioned, there is potential for organisations to compete with Sky.

Re: sky movies (excess profits)
 

Nooooooooo :shocked:



10 million more ahead of me in the que for TiVo :mad:



Let the demons stay with their dark lord :p:

Re: sky movies (excess profits)
 

LOL

Re: sky movies (excess profits)
 

Have you actually read the OFCOM papers?

Re: sky movies (excess profits)
 

You really don't get it do you ?


Sky make excess profits and use them to buy rights to movies and VOD for the UK pricing everyone else out of the market unless they have many millions spare to keep going till they get enough subs to cover costs.


Sky have had the VOD rights included right from the launch of their movie channels locking everyone else out.


Its only now that real mega companies look at VOD themselves that they are under threat and IMHO they only have films included in their VOD for no charge is to try to say they are using the content and still block all others getting it.

Re: sky movies (excess profits)
 

Yes I Have. I haven t outright said I disagree with it was merely stating sky do show movies via VOD.