BSkyB slams Ofcom decision on sports channel prices

BSkyB is to challenge the “unprecedented and unwarranted intervention” by the broadcasting watchdog after it was ordered to reduce the amount it charges rivals to show its premium sports channels by 23%.

Sky Sports
Sky Sports

Ofcom says the pay-TV broadcaster must cut the wholesale price at which it sells individual channels Sky Sports 1 and 2 to rivals such as Virgin Media from the current £13.88 to £10.63 per subscriber per month, a 23.4% reduction.

The price of a bundle of the two channels must also be reduced from £19.15 to £17.14, a 10.5% drop, the watchdog adds.

Ofcom says action must be taken to offer lower prices and greater choice to customers. It follows a three-year review into the pay-TV market prompted by complaints from rivals including Virgin Media and BT that Sky was stifling competition.

In a statement, Sky says it will challenge the watchdog’s ruling before the Competition Appeals Tribunal.

It adds: “There should be no doubt that Ofcom’s actions represent an unprecedented and unwarranted intervention.

“This is a marketplace where customers are well served with high levels of choice and innovation. Consumers will not benefit if regulators blunt incentives to invest and take risks”.

Ofcom did clear the way for Sky to launch a paid-for TV service on the digital terrestrial platform Freeview.

Gavin Patterson, chief executive of rival BT Retail, says it is “disappointing” that Ofcom did not order Sky to reduce the wholesale prices for Sky Sports 1 and 2 by more. He says that prices should be cut for all Sky’s sports channels and its movie channels, adding that “pubs and clubs should also have been offered some help as they have no option but to pay sky high prices”. 

“Today’s decision from Ofcom is disappointing but a step in the right direction,” he says. 

Philip Cullum, deputy chief executive of customer protection body Consumer Focus, says Ofcom deserves “much praise” for its ruling. 

“We welcome Ofcom’s moves to ensure fair and effective competition, which we hope will lead to more choice, further innovation and lower prices,” he says.

The regulator says the new pricing arrangement is effective immediately and that Sky has six weeks to make contract arrangements with rival pay-TV firms.

Latest from Marketing Week

PLEASE SIGN IN OR REGISTER. IT'S FREE, QUICK AND EASY!

Access Marketing Week’s wealth of insight, analysis and inspiration that will help you develop as a marketer and leader.

Register and receive the best content from the only title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work, so we can make Marketing Week more relevant to you.

Register now

THE BEST CONTENT

Our award winning editorial team and columnists will ask the biggest questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.

THE BIGGEST ISSUES

From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we will be your guide.

PERSONAL AND PROFESSIONAL DEVELOPMENT

Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Dedicated to developing your skills and helping you achieve marketing excellence. Find guidance on leadership, professional development and the latest industry jobs.

Having problems?

Contact us on +44 (0)20 7292 3711 or email subscriptions@marketingweek.com

If you are looking for our Jobs site, please click here