scene
Well-known member
Sky has, in the past, cross-funded its Satellite business from other parts of its business and engaged in other *interesting* practices to help ensure that competition has been squeezed out of the market. Their recent record on major investment is dubious. When it comes to new programming, they have a habit of letting other channels take the risks with new programmes and then, once the clear viewer favourites have been established, securing exclusive rights to said programmes to help increase market share - see the history of Lost, 24, Prison Break, Stargate (need I continue?).
For whatever reason, Sky now has an effective monopoly on Satellite TV in the UK and, in certain areas of Sport, an effective monopoly on the TV rights across Europe. It therefore behooves the regulators in the UK (and in the case of Sport - Europe) to ensure that Sky does not abuse this position, much as Anti-Trust laws do in the US.
This was witnessed, in part, in the last round of bidding for Premier Football rights, where any one party (read Sky) was prevented from gaining rights to all games. (How effective this was can be discussed elsewhere.)
Again, Sky's attempts to prevent competition by preventing NTL / Virgin from buying ITV (and thus gaining programme production and a greater ability to compete for Sky's jewel the Premier Football rights) by buying a block of ITV shares have been subject to legal challenge and Sky has now lost its appeal and will be forced to reduce its share holding.
Now Ofcom is correctly performing its role, to protect the consumer and encourage competition by ensuring that Sky cannot abuse its dominant position in the market and to force it to drop its wholesale prices to competitors for content. Sky has taken advantage of just such a ruling to compete on broadband with BT and now must learn that the sword of regulation is two-edged.
We, as consumers, should welcome this move as, in the long run, it could ensure that we get better services for less. Imagine a world where there was not competition to Sky, or where there was not market regulation? This is the situation for pubs showing live football, where Sky is effectively the only supplier and there is no regulation as this is a B2B market. Sky decided a while back that pubs could afford to pay for the privilege of showing matches and could offset costs by increased beer sales so upped their prices by nearly 1,000%!
Now do you still want to complain about OfCom's actions?
For whatever reason, Sky now has an effective monopoly on Satellite TV in the UK and, in certain areas of Sport, an effective monopoly on the TV rights across Europe. It therefore behooves the regulators in the UK (and in the case of Sport - Europe) to ensure that Sky does not abuse this position, much as Anti-Trust laws do in the US.
This was witnessed, in part, in the last round of bidding for Premier Football rights, where any one party (read Sky) was prevented from gaining rights to all games. (How effective this was can be discussed elsewhere.)
Again, Sky's attempts to prevent competition by preventing NTL / Virgin from buying ITV (and thus gaining programme production and a greater ability to compete for Sky's jewel the Premier Football rights) by buying a block of ITV shares have been subject to legal challenge and Sky has now lost its appeal and will be forced to reduce its share holding.
Now Ofcom is correctly performing its role, to protect the consumer and encourage competition by ensuring that Sky cannot abuse its dominant position in the market and to force it to drop its wholesale prices to competitors for content. Sky has taken advantage of just such a ruling to compete on broadband with BT and now must learn that the sword of regulation is two-edged.
We, as consumers, should welcome this move as, in the long run, it could ensure that we get better services for less. Imagine a world where there was not competition to Sky, or where there was not market regulation? This is the situation for pubs showing live football, where Sky is effectively the only supplier and there is no regulation as this is a B2B market. Sky decided a while back that pubs could afford to pay for the privilege of showing matches and could offset costs by increased beer sales so upped their prices by nearly 1,000%!
Now do you still want to complain about OfCom's actions?