Sky warned to loosen grip on blockbuster movies
Sky's "stranglehold" over the pay-TV movie industry is to be weakened following a report published by the Competition Commission.
Sky has deals with six of the top Hollywood studios for exclusivity periods on their movies, and the CC has estimated that consumers are paying £50-60 million more than they should be and that the prices charged to Virgin Media and BT are too high.
Laura Carstensen, chairman of the Competition Commission's movies on pay-TV investigation, said: "Sky has had control of recent movie content on pay TV for many years. At the heart of the problem is Sky's strong position in the pay-TV market, with twice as many subscribers to pay TV as all other traditional pay-TV retailers put together.
"This provides Sky with a great advantage when it comes to bidding for movie rights, which no rival bidder has yet been able to overcome – and, if things stay as they are, we see no likely prospect of change.
"We have found that, as a result of this lack of effective competition, subscribers to Sky Movies are paying more than they otherwise would, and there is less innovation and choice than we would expect in a market with more effective competition."
Virgin Media welcomed the news. The cable giant contacted Pocket-lint with a statement from CEO Neil Berkett which read:
"Virgin Media has long argued that there are deep rooted problems in the Pay TV movies market which have been severely hampering competition. We're pleased that the Competition Commission has provisionally recognised that consumers have suffered significant harm from Sky's stranglehold and are paying far too much to watch films at home.
"We hope today's findings will lead to a dramatic transformation of the market and allow new compelling services to flourish that give consumers much greater choice of innovative film services. We look forward to working with the Commission to ensure that movie fans reap the benefits of a more competitive and dynamic market."
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