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published:
10-Dec-07
territories:
UK
categories:
Content deal
Rivals accuse BSkyB of stifling competition
Competitors to BSkyB claimed that the pay-TV platform has created a "vicious circle" of reduced competition and higher prices for the consumer in the UK. The claim from BT, Setanta Sport, Top Up TV and Virgin Media, was made to UK broadcast regulator Ofcom earlier this year and has just been published. The companies alleged that BSkyB's position of strength is based on its ownership of sports rights and premium movie rights, its share of the market for wholesale supply of sports and film channels, and its share of subscriptions to premium movie and sports channels (claimed to be 86 per cent). The companies, which are offering competing pay TV services to BSkyB via cable, DTT and broadband, claimed that its leading position risks becoming even more entrenched because of a 'vicious circle', saying Sky holds key rights and either refuses to supply its channels to competing platforms or offers them on uneconomic terms; competition from other retailers is therefore restricted; BSkyB's control of the biggest base of pay TV subscribers and the largest pay TV platform inhibits competing bids from other subscribers.
The companies argued than BSkyB should be regulated 'at all stages of the supply chain' and propose separating its channel and distribution business.
BSkyB's response, also published by Ofcom, refutes its competitors' arguments, in particular the "vicious circle" claim which it argues is based on flawed logic, incorrect facts, and a misrepresentation of BSkyB's way of doing business.
BSkyB argued that the complaint treats pay TV as if it exists in a 'bubble', whereas the offer of free TV services – including a growing array of digital channels - amount to a substitute for pay TV since both are used to satisfy consumers' demand for entertainment and information. The company adds that it does not take into account the rapidly-evolving UK market, with 10 million broadband households able to receive streaming video.
However, the core of BSkyB's response is a lengthy and detailed demolition of the "vicious circle" claim. It argues that it is impossible for BSkyB to reduce the per subscriber cost of content because it is acquired on a per subscriber basis (typically movie contracts are linked to subscriber numbers while contracts for channels are based on the number of subscribers). On the other hand, while content which is acquired at a fixed cost will become cheaper on a per-subscriber basis if subscriber numbers increase, this has nothing to do with the complaint about vertical integration. Furthermore, BSkyB's competitors can also benefit in the same way – as Setanta did when it agreed carriage for its Premier League channels to Virgin Media's 1.6m homes.
Ofcom's enquiry – aimed at establishing whether there is a case for BSkyB to be referred to the competition commission – began in March. The regulator is expected to report its conclusions before the end of the year.
Our take...
The publication of the four companies' complaint and BSkyB's response provides an insight into the bitter competition for the UK pay TV market. The battle between BSkyB and Virgin Media has been intense, but the other companies have previously steered clear of public slanging-matches. BSkyB's response appears to destroy the basis of the complaint, and effectively challenges Ofcom to come up with the basis for any referral of the case itself. While BSkyB is undoubtedly the dominant player in the pay TV market, the emergence of Setanta in particular has reduced its dominance in one key area – the provision of live Premier League football. Setanta has already signed up one million subscribers for its service, which also includes exclusive golf, rugby union and Scottish premier league matches.
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Analyst, market intelligence & notices
Reports
(5) 1-5 showing
HDTV 2008: Global uptake, strategies and business model...
This new HD report focuses on business models, costs and benefits derived from HD services, notably from a pay TV operator perspective. The report is mostly centred on broadcast HDTV and pay HDTV across all platforms (satellite, terrestrial, cable, IPTV) but it is also looking at the overall migration to HD in all audiovisual services and devices (displays, set-top boxes, online HD, hi-def video, hi-def gaming, hi-def VOD).
published:
01-Jul-08
territories:
Albania, Austria, Belgium, Canada, China, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong, Hungary, Iceland, Ireland, Italy, Japan, Korea. Rep [S], Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Russian Federation, Singapore, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, Thailand, Turkey, UK, USA - Asia-Pacific, Benelux, Central and Eastern Europe, Europe, Africa and Middle East, Nordic Region, North America, Regional Totals
Vincent Létang
The Business of Children's Television
Covering Western Europe, North America, Australia and New Zealand, this report includes comprehensive data on spending on originated and acquired children's programmes, together with the value of the home entertainment market and licensing. The report also details hours of children's programmes transmitted over the last five years, the number of theme channels, and viewing by the children's audience. Profiles of the 25 leading players in the business are provided, including production and exploitation strategies, financial results and key properties.
published:
20-Jul-07
territories:
Belgium, Denmark, Finland, France, Germany, Italy, Netherlands, Norway, Spain, Sweden, UK, Canada, USA, Australia, New Zealand, Japan
Guy Bisson
Tim Westcott
European Broadband Cable 2007
The seventh edition of this best selling report is the only study of the European cable industry that is fully endorsed by Cable Europe (previously ECCA) and its members. The report contains a detailed analysis of 22 Western and Eastern European cable markets - for each country coverage includes homes passed, cable TV, telephony, Internet, unique cable homes, digital vs analogue as well as breakouts for cable TV, telephony and Internet revenues.
published:
20-Jun-07
territories:
Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Hungary, Ireland, Israel, Luxembourg, Netherlands, Norway, Poland, Portugal, Romania, Slovenia, Spain, Sweden, Switzerland, UK
Guy Bisson
Maria Aguete
Chris Dziadul
European Digital Terrestrial Television: Market assessm...
The latest report from Screen Digest provides a detailed analysis of the European
digital terrestrial television (DTT) market in 15 Western and 4 Eastern European markets.
The report includes historical and five year forecast household and penetration data for free,
pay and top-up DTT as well as penetration numbers for cable, DTH and IPTV.
published:
21-Jan-06
territories:
Austria, Belgium, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Netherlands, Norway, Poland, Portugal, Romania, Russian Federation, Serbia & Montenegro, Slovakia, Slovenia, Spain, Sweden, Switzerland, UK, Ukraine - Central and Eastern Europe
Guy Bisson
Chris Dziadul
European IPTV: Market assessment and forecasts to 2009
This report considers the prospects for IPTV services in sixteen European markets and the threat posed to the more established pay TV operators. Analysing key factors in each market the conclusions illustrate those countries best placed to take advantage of the triple play and advanced on demand services offered by IPTV operators.
published:
16-Nov-05
territories:
Austria, Belgium, Denmark, Estonia, Finland, France, Germany, Ireland, Italy, Netherlands, Norway, Spain, Sweden, Switzerland, UK, Slovenia
Daniel Schmitt
Articles
European pay TV giants hold sway
Key DTH satellite broadcasters face continuing challenges for pay TV rights, especially in sports
published:
26-Mar-08
territories:
France, Italy, Spain, UK, Germany - Western Europe
Tim Westcott
Rapid on-demand growth in Europe
Increased availability of content has changed the pay-per-view landscape
published:
26-Mar-08
territories:
Belgium, France, Germany, Italy, Netherlands, Norway, Poland, Spain, Sweden, UK - Europe
Richard Broughton
Euro HDTV channels expand
There were 78 high-definition channels on air in Europe at the end of Year Two, the year's launches roughly divided between free-to-air, basic pay and premium platforms. But the real channel surge is yet to come. New operators and major sporting events will boost the profile of HDTV in 2008.
published:
22-Feb-08
territories:
Albania, Belgium, Denmark, France, Germany, Italy, Netherlands, Poland, Russian Federation, Spain, Sweden, Switzerland, UK - Benelux, Europe, Nordic Region, Western Europe
Vincent Létang
Internet protocol TV market
Although IPTV as a platform has yet to achieve a subscriber base to rival that of cable or satellite, it has made serious gains in the years since it first arrived in Europe. France, is, and will remain, the main market for IPTV in Europe, with seven operators and a penetration rate of over 14 per cent. Its market share (now over 50 per cent of Europe's IPTV viewers) will decline as other European IPTV services start to take hold. By 2011, 65 per cent of European IPTV viewers will be outside France.
published:
23-Jan-08
territories:
Austria, Belgium, Czech Republic, Estonia, Finland, France, Germany, Greece, Hungary, Italy, Latvia, Lithuania, Netherlands, Norway, Poland, Romania, Russian Federation, Slovakia, Slovenia, Spain, Sweden, UK, Switzerland, Portugal, Ireland, Denmark - Central and Eastern Europe, Europe
Richard Broughton
Advertising market under pressure
Advertising market under pressure: TV ad revenues will struggle to match an already sluggish GDP growth in the next five years in Europe and the US. 2008 in particular is uncertain, between 'quadrennial' drivers (Sports, US elections) and adverse economic conditions
published:
23-Jan-08
territories:
France, Germany, Italy, Spain, UK, USA - North America, Western Europe
categories:
Market data/forecast revision, General market development
Vincent Létang
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Western Europe
ARPU
Broadcasters discuss online TV consolidation