Pay TV phase three document - Stakeholders - Ofcom

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Pay TV phase three document – non-confidential version 1.86 In doing so, one option might be simply to roll over the existing commitments. These have had some beneficial elements, facilitating the entry of Setanta into the market, and the development of new retail packages, in particular entry-level packages on non-Sky platforms. However, partially offsetting this, some existing consumers on Sky’s satellite platform have had to purchase an additional subscription. Moreover, the consumer benefits which have resulted from Setanta’s entry into the market have not proved to be sustainable, at least in the form described above. 1.87 We would expect to take this evidence into consideration when considering any new set of commitments. We emphasise however that this does not mean that our objective in considering any new commitments would be to intervene more aggressively in order to ensure the success of a successor to Setanta such as ESPN. Rather we would consider as a national competition authority whether the continued operation of the collective selling arrangement by the FAPL appreciably prevents, restricts or distorts competition contrary to Article 81(1) EU (and Chapter 1 CA98) based on evidence of developments in the market. In examining the need for ex post intervention we are likely to include consideration of the following: Next steps � We would wish to minimise any disruptive effect for existing consumers, by ensuring that they continue to have access to the full range of content. We would particularly wish to ensure that consumers on existing platforms continue to have access to the full range of FAPL content. � We would want to facilitate competition. The current commitments seek to achieve this by setting aside one package of rights, providing cross-platform exclusivity in relation to a subset of matches, for new entrants. We would wish to review the effectiveness of this approach. An alternative might be a reduction in cross-platform exclusivity for some matches, most likely achieved by making a subset of matches available on both DTT and existing platforms. � We would wish to ensure that any reduction in the exclusivity premium associated with these rights does not artificially depress their value. � We would wish to explore mechanisms by which commercial as well as residential consumers could be protected from the detrimental effects of collective selling. For example, we might want to establish separate sets of rights for residential and commercial subscribers. This would not risk damaging rights values because the two sets of rights would not be substitutes, but could potentially offer a viable entry strategy for retailers targeting commercial consumers, as well as providing greater transparency as to profitability levels. 1.88 We are consulting on our analysis until 18 September 2009. We will then consider all responses before making decisions on whether to intervene under our sectoral powers and whether to issue a consultation on a reference to the Competition Commission. 17
Pay TV phase three document – non-confidential version Section 2 2 Introduction and legal framework Summary 2.1 This is our third document on pay TV. We first consulted in December 2007 on the overall structure and operation of the market, before setting out more detailed analysis of market definition and market power in September 2008, along with broad proposals for remedies. 2.2 In this document we consider whether to proceed under our sectoral powers in s316 and consider the detailed form that a licence condition under s316 might take. 2.3 Ofcom has published a series of documents on the market investigation, either produced by Ofcom or by others. In order to provide maximum clarity to readers, we describe these in chronological order below. All of the documents mentioned are available on Ofcom’s website via this page http://www.ofcom.org.uk/tv/paytv/. 18 � On 20 March 2007, Ofcom announced that it was opening an investigation into the pay TV industry. BT, Setanta, Top Up TV and Virgin Media (“The Four Parties”) had provided Ofcom with a preliminary submission on the pay TV industry on 16 January 2007. � On 3 July 2007, the Four Parties made a submission to Ofcom on “the need for a market investigation into the pay TV industry” (the ‘July Submission’). � On 30 October 2007, Sky made a submission to Ofcom in response to the July Submission. � On 18 December 2007, Ofcom published a first consultation on pay TV. � The consultation closed on 26 February 2008. However, we received a number of responses after that date, the last of which was submitted by Sky on 11 April, and in non-confidential form on 1 May. � On 29 February 2008 the Four Parties made a submission to Ofcom in response to Sky’s submission of 30 October 2007. � On 13 May 2008, Sky provided Ofcom with a supplement to its previous response. � On 1 July 2008, Sky provided two further documents to Ofcom, which it had commissioned from CRA International. One was a submission on Sky’s incentives to wholesale content, and the other was a further submission on comparing pay TV prices across Europe. � On 6 August 2008, the Four Parties made a further submission to Ofcom, responding to Sky’s response to our December Consultation. � Also on 6 August 2008, BT made a submission to Ofcom entitled “Submission on why a reference to the Competition Commission is fully justified”.
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