EC Greenlights UK Rival to Murdoch’s BSkyB

15 November 2004

Rupert Murdoch's BSkyB, which has not encountered direct competition in the UK TV blockbuster movie market since it launched in 1989, is about to see the end of its lucrative film distribution monopoly.

It was Sky's dominance of the market for TV premieres of bigtime Hollywood movies (via its Murdoch sibling Fox Studios) that enabled it to stomp its sole rival, British Satellite Broadcasting, into the ground - at the same time grabbing a substantial subscriber lead over cable rivals NTL and Telewest.

Soon, however, BSkyB will again face a competitor in the first-run television movie market - and one that'll be significantly better funded given the muscle of its two main backers: the Walt Disney Company and Sony's Columbia Pictures. Also involved is a little known UK video-on-demand company, the ON Demand Group.

The new joint venture, MovieCo, will offer on-demand movies for a flat monthly rate. It was hailed by the EC as "an open platform to which movie content providers will have access on a non-discriminatory basis, therefore enabling them to make films available by way of video-on-demand directly to customers within the two big UK cable networks Telewest and NTL."

The EC, however, played down suggestions it is out to topple BSkyB's market dominance. Said the Commission: "The joint venture will only be a minor competitor in the market for the wholesale distribution of pay TV and video-on-demand channels compared to the dominant player, BSkyB."

Media analyst Lorna Tilbian of Numis Securities agrees: "I doubt it will have much impact on Sky," she opined. "With 7.4 million paying subscribers, BSkyB controls more than half the market for pay TV in Britain. Telewest and NTL have around three million subscribers between them."

  • Meantime, BSkyB announced subscriber growth well ahead of forecast, adding 62,000 customers in the quarter to end September and lifting its subscriber base in the UK and Ireland to over 7.4 million.
          Chief executive James Murdoch, still very much on probation with nepotism-sceptics, had his credibility boosted by a 20% increase in the number of households signing up to the Sky Plus personal video recorder service, a rise of 77,000 to 474,000.

    Data sourced from New York Times and; additional content by WARC staff