Sky remains movie leader according to UK regulator Ofcom

New VoD players such as Lovefilm and Netflix have not loosened Sky’s grip on movies, according to an Ofcom report to the Competition Commission.

In a recently published paper, the media regulator said new widely available VoD services have long term potential and clear ambitions.

But, it added: “Their ability to compete directly with Sky on a sustainable basis is not certain and critically dependent on access to compelling content, which is currently controlled by Sky.”

The Competition Commission launched a probe following the launch of the rival online services in March as an extension of its ongoing investigation into Sky’s control of the UK’s pay TV movie market.

Ofcom’s response, which will feed into the conclusions due in July, said that while the new entrants had secured some access to movies they remained just as hobbled as existing players - such as Virgin Media - by Sky’s control of the first window subscription rights to films.

“Recent market developments [Netflix and Lovefilm] should be viewed in context and that their potential market impact should not be overestimated,” said Ofcom’s response.

“The underlying competition issue, of access to premium content, remains a fundamental concern.”

Factors such as consumers prefer to watch films on TV, rather than computers, as well as the unproven penetration of internet connected TVs and Sky’s own decision to roll out OTT service Now TV was also noted.

This story was originally published in Broadcast.