Pay TV phase three document - Stakeholders - Ofcom

Pay TV phase three document – non-confidential version
4.263 Sky’s movies channels enable viewers to view content on a linear television. This is
of course just one way for viewers to watch films. The studios also make the same
films available via a number of alternative formats.
4.264 Cinematic release: films are first released at the cinema often accompanied by very
substantial and costly marketing and promotional campaigns. Although average
ticket prices were £5.20 in 2008 197 , Screen Digest reported that the cinema release
“is regarded as a marketing platform and most distributors will not make profit at this
stage.” However, cinema release is important to consumers: research conducted by
Sky reported that “films were most special at the cinema, closely followed by owning
films on DVD” 198 .
4.265 DVD retail: consumers purchase DVDs in order to obtain permanent access to a
number of specific favourite films within a film library of their own. Sky’s consumer
research 199 showed that DVD retail was perceived as offering very good value as it
provides the benefits of permanent ownership of an extremely popular delivery
mechanism. The average price of a DVD was about £8.97 in 2008 200 . Just over a
quarter of DVDs bought (27%) are bought as gifts rather than for personal or family
use 201 .
4.266 DVD rental: consumers can rent DVDs to access recently released films on a
temporary basis. Sky’s research found that “renting films is still reasonably popular
(even amongst Sky Subscribers) with renters welcoming variety, the mid week deals
and improved window 202 . Consumers can chose to rent from traditional over the
counter stores or – increasingly – from online subscription services. The majority of
rentals (by value) are still over the counter rentals but the quantity and value of online
subscription rentals is growing rapidly. Typical prices to rent latest release films are
around £3.75 over the counter (although there may be discounts to this headline
price) and around £2.40 online 203 .
4.267 Pay per view (PPV): a number of TV retailers including Virgin Media, Sky, Tiscali
and BT Vision offer PPV movies, allowing consumers a convenient way to access
new movies. The service is available to over 13 million subscribers. ‘True’ VoD 204 is
possible on Virgin’s cable network and Tiscali’s and BT’s IP networks. Sky’s DSat
service provides ‘Near’ VoD 205 .
197 See for example: http://www.cinemauk.org.uk/ukcinemasector/ukcinemaindustryeconomics/averageukticketprices/.
198 Sky’s third response to Ofcom information request of 29 May 2008.
199 Ibid.
200 British Video Association Year Book 2009 page 28.
201 Source: British Video Association Yearbook 2009 page 73.
202 Sky’s third response to Ofcom information request of 29 May 2008.
203 Source: British Video Association Yearbook 2009 page 80.
204 ‘True’ VoD means consumers can get instant access to the film of their choice.
205
‘Near’ VoD (nVoD) refers to a multiple linear channels that broadcast the same content at
staggered start times.
108