Pay TV phase three document - Stakeholders - Ofcom

Pay TV phase three document – non-confidential version
7.37 [ � ] said that Sky distributed its content in a way that makes it cheaper / more
attractive for the customer to choose Sky than select another distribution method.
Without intervention customer choice would be effectively reduced to one operator 474 .
Innovation
7.38 Sky believed that the UK’s pay TV market was delivering positive outcomes for
consumers and that there has been substantial innovation in the market due to
competitive pressures at the retail level. Further to that Sky cited a second report it
had commissioned from PwC, which, Sky claimed, supported the fact that the UK is
one of the “leaders in terms of innovation services” 475 .
7.39 Sky highlighted that it provided consumers with a number of VoD services either via
the TV or the PC. It stated that the number of VoD services that are available to
consumers has increased substantially in the past few years and pointed out other
platforms providing such services. Sky again cited iPlayer, which it considered a
huge success, as being available through a number of different platforms and being
used by a large number and a wide variety of consumers 476 .
7.40 Sky also argued that it has made substantial innovations in its pricing and packaging
over time. The introduction of genre packages provided Sky’s subscribers with
greater choice and flexibility. The PwC report recognised this and found that Sky has
been a leader in the introduction of genre-themed basic packages.
7.41 Freesat acknowledged that at present some consumers benefit from innovative
platform enhancements made on the Sky platform. It asked whether further
innovations would have been generated, particularly on non-satellite platforms, if
there had been more vigorous competition in that sector 477 .
7.42 Virgin Media agreed with Ofcom’s analysis in relation to innovation. Additionally, it
believed that consumers were being denied the ability “to choose… the retail product
that best serves their needs” due to the lack of packaging innovation 478 .
7.43 [ � ] argued that there were adverse effects in markets such as residential retail
broadband, where Sky was using bundled services to leverage its position 479 .
Satisfaction
7.44 Sky referred to Ofcom’s own research which it believes showed that consumers are
satisfied with their pay TV services, and getting good value for money from them. Sky
said it was not surprised to see the high levels of consumer satisfaction, given the
474 [ � ] response, question 22.
475 Sky response, section 2, paragraph 2.34.
476 Sky response, section 2, paragraph 2.36.
477 Freesat response, question 22.
478 Virgin Media response, Annex 1, paragraph 23.1(b)
479 [ � ] response, paragraph 2.1.
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