sky movies (excess profits)

[Ignitionnet]

Originally Posted by Big-Ted

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.

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 ----------

Originally Posted by Rattus

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.

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

[Rattus]

Originally Posted by Ignitionnet

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.

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.

[BenJSmyth]

Originally Posted by Rattus

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.

That is a very valid point indeed.

[Ignitionnet]

Originally Posted by Rattus

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.

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.

[BenJSmyth]

Originally Posted by Ignitionnet

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.

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.

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.

[Ignitionnet]

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?

Originally Posted by Ignitionnet

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?

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.

[Ignitionnet]

Originally Posted by ahardie

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.

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.

[BenJSmyth]

Originally Posted by Ignitionnet

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.

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.

Originally Posted by Ignitionnet

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.

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.

[Ignitionnet]

Originally Posted by ahardie

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.

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 ----------

Originally Posted by BenJSmyth

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.

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.

Originally Posted by Ignitionnet

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.

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.

[Ignitionnet]

Originally Posted by ahardie

Having a friendly regulator? This is sheer fantasy.

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

Originally Posted by ahardie

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.

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.

Originally Posted by Ignitionnet

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.

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.