BSkyB’s market dominance may end with new entrants

Written on:May 23, 2012
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Rupert Murdoch

No longer No. 1?...BSkyB faces competition from new entrants (Image Courtesy Investors Europe)

According to Competition Commission, a broadcasting regulator, British Sky Broadcasting (BSkyB) is no longer the market leader in the pay-TV movie market with the arrival of new entrants like Amazon-owned Lovefilm and Netflix.

“Competition between providers of movie services on pay TV has changed materially and, as a result of these changes, consumers now have much greater choice,” said Laura Carstensen, chairman of the Competition Commission investigation.

Carstensen added, “Lovefilm and Netflix offer services which are attractive to many consumers and they appear sufficiently well resourced to be in a position to improve the range and quality of their content further.”

The regulator has said it will review responses to its revised finding before reaching final verdict to propose any remedial measure.

he provisional finding was a reprieve for BSkyB which has been at loggerheads with regulators frequently in recent years regarding its dominance of pay-TV, while risking its ability to lure customers with the offer of exclusive movie and sports content.

The Competition Commission had previously found that Sky’s subscriber base of more than 10 million homes gave it an advantage over rivals who struggled to bid for the rights to first-run Hollywood movies.

While the commission noted on Wednesday that BSkyB still held the rights to the movies of all six major Hollywood studios for the first subscription pay-TV window, it said Netflix and the Lovefilm had already acquired rights to several other studios.

The commission did admit that competition in the pay-TV retail market was overall ineffective, however it said the scope of its investigation was limited by the terms of the reference.

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