The competition watchdog is to consult on options to reduce Sky’s stranglehold on showing the top movies from the six biggest Hollywood studios.
In a provisional ruling, CC says the size of Sky’s subscriber base means that it is difficult for rivals to successfully bid for rights. It adds that despite Sky’s movie channels being available to customers of rival pay-TV broadcasters, the prices it charges the likes of Virgin Media to show the channels means they are not able to make money from subscriptions.
Laura Carstensen, chairman of the investigation, says: “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.”
Currently, some movies are available only on Sky, which pays almost £300m per year to show the most popular films.
The Commission, however, proposes restricting the number of major studios from which Sky can exclusively license movies from. Allowing others to have the same rights Sky enjoys is another option being considered.
Sky says in a statement: “We note that the Competition Commission’s findings remain provisional and have been issued for consultation.
“We will continue to engage with the Competition Commission during the on-going regulatory process.”
The CC’S full investigation will be published next week. It is inviting comments on its proposals until 16 September.