BSkyB under new pressure to share premium channels

29 June 2009

LONDON: Ofcom, the UK media and communications regulator, has signalled that satellite broadcaster BSkyB may have to offer its premium channels to rival services at fixed prices, as part of new proposals reviewing the UK's pay TV market.

According to the watchdog, BSkyB's current market dominance, particularly in sports such as Premier League soccer, would be best solved via a “wholesale must-offer”. This wouldoblige the News Corp-controlled company to share its premium content services such as movie and sports channels to competitors. It would, said Ofcom, provide a "most appropriate way of ensuring fair and effective competition".

But BSkyB was quick to reject the suggestion: "We disagree fundamentally with Ofcom's approach, analysis and conclusions," said a spokesperson. "In light of Ofcom's determination to pursue its preferred outcome, we will use all available legal avenues to challenge this unwarranted intervention." 

Although subscribers to the rival Virgin Media cable service can include BSkyB's premium sports channels in their package, Ofcom wants to enable and encourage more service providers to offer the channels.

Rival broadcasters welcomed the Ofcom proposals. Gavin Patterson, chief executive of BT Retail, whose BT Vision service offers on-demand material on top of free-to-view broadcasts, said: "The proposal to force Sky to wholesale its content is welcome but we now need Ofcom to step up the pace and to enforce this rigorously." 

Sky's pre-eminent position in sports broadcasting to the fore last week when Setanta, one of its smaller rivals with rights to a limited number of Premier League soccer games, collapsed.

Data sourced from Financial Times and BBC; additional content by WARC staff