Pay TV phase three document - Stakeholders - Ofcom

Pay TV phase three document – non-confidential version
4.252 Our current view is therefore that the relevant market is for retail supply of Sky Sports
1, Sky Sports 2 or Setanta Sports 1 191 , as well as HD versions of these channels or
TV packages that contain these channels.
4.253 We therefore proceed in this document to consider whether there is a risk that there
is not, and will not be, fair and effective competition in the provision of packages
containing the above sports channels. As is often the case with market definition, the
precise boundaries of the relevant market are difficult to determine with certainty. In
the following sections we assess retail market shares including out of market
constraints such as highly valued live football, rugby union, rugby league, tennis and
golf on FTA TV.
Assessment of the market for the wholesale of premium movies channels
Introduction
4.254 Films are an important genre of programming for consumers. They have different
characteristics to sport in that they are not viewed ‘live’ as they are produced. This
means they can be retailed to consumers in many different formats and in different
time “windows”. They can be watched on traditional linear TV channels including Sky
Movies channels and other basic or FTA channels. Alternatively, they can be
downloaded via the open internet, bought or rented on DVD, or watched on an ondemand
service. In contrast to sports content, the concept of live broadcast is not
relevant (although rights to recently-released movies are important). This allows
distribution over a wider range of formats, such as VoD and PVRs.
4.255 The focal product for our assessment of the wholesale market for premium movies is
the suite of Sky movies channels. Sky wholesales 12 premium movie channels in
three bundles:
� Sky Movies 1: Sky Movies Comedy, Sky Movies Family, Sky Movies Classics,
Sky Movies Modern Greats, Sky Movies SD1 192 .
� Sky Movies 2: Sky Movies Action and Thriller, Sky Movies Sci-Fi and Horror, Sky
Movies Indie, Sky Movies Drama, Sky Movies SD2.
� Sky Movies Mix: Sky Movies 1 and Sky Movies 2, Sky Premier and Sky Premier
+1.
4.256 These channels combine a number of important characteristics relating to the
quantity and quality of the films shown and the timing and format of release.
Specifically, the channels show all of the films from the six major Hollywood studios
in the “first pay TV window”. Disney Cinemagic is the only other channel that shows
films from “first pay TV window” from a Hollywood Major as it shows a limited number
191 Setanta went into administration on 23 June 2009, shortly after the live FAPL rights which had
been held by Setanta were awarded to ESPN. ESPN has announced that it has agreed a wholesale
deal with Sky for distribution on Sky’s DSat platform. It has also announced an intention to make its
channel including FAPL coverage ‘widely available across multiple pay-TV platforms’, although at the
time of writing no other details of availability across platforms other than Sky’s have been announced.
Our subsequent conclusions are likely to be independent of whether Setanta Sports 1, or some other
channel provided by ESPN, exists as part of the Core Premium Sports market.
192 See Sky response to Ofcom’s request of 20th March 2009 question 8. Sky also retails some HD
versions of its movie channels, e.g. Sky Movies HD1, Sky Movies HD2.
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