The Competition Commission has reversed its stance that Sky Movies holds an unfair advantage in the pay TV movie space, as a result of the emergence of online players Lovefilm and Netflix

The new position goes against its initial findings, published in August last year, which found rival pay TV movie providers were struggling to break into the market due to Sky’s dominant position. In March, it indicated it was extending its findings to include emerging VoD services.

The Commission’s new findings, published today, noted Lovefilm and Netflix had acquired first subscription pay TV window (FSPTW) rights from several studios, and that the growth of competitively priced multiplatform movie services would continue this trend.

Laura Carstensen, chairman of the movies on pay TV market investigation, said that as the market had developed consumers now had much greater choice.

“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,” she said.    

Carstensen said there continued to be issues within the market, but were outside of the Competition Commission’s remit to investigate.

“We still believe that competition in the pay-TV retail market overall is ineffective. However, the scope of our investigation is limited by the terms of the reference to us to the impact of FSPTW movies and, in our view, Sky’s position with respect to FSPTW movies does not provide Sky with a material advantage over its rivals in the pay-TV retail market.”

The revised provisional findings, which recommend no action, are now open to further submissions until 13 June.

Virgin Media has “strongly disputed” the provisional findings, claiming competition remains hampered.

“Sky’s control of movie rights is restricting competition in the UK, leading to higher prices, reduced choice and less innovation,” said a spokesperson.

“The recent emergence of providers, such as Lovefilm and Netflix, has done nothing to impact Sky’s advantage and we’re currently working to better understand the reasons for the Commission’s decision as we consider next steps.”

First published in Broadcast

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