Pay TV phase three document - Stakeholders - Ofcom

Pay TV phase three document – non-confidential version
2.48 Under s3(5) Ofcom must also, when performing the duty of furthering the interests of
consumers, have regard to the particular interests of those consumers in respect of
choice, price, quality of service and value for money. We have used this section to
formulate the criteria by which the sector has been assessed and therefore to
address the question of whether Ofcom needs to act to ensure “fair and effective
competition” for the purposes of s316.
2.49 In the rest of this section:
� We summarise the work we have carried out since the last document.
� We discuss some of the main developments in the market since the last
document was published.
� We answer some of Sky’s criticisms on the running of our process.
� We set out in more detail the content of the document.
� We explain the relationship with the assessment of Sky’s Picnic proposal.
� We explain the position on other issues raised by the Four Parties.
Work carried out since our Second Pay TV Consultation
2.50 Since publishing our Second Pay TV Consultation in September 2008, we have
carried out a variety of work, in particular in order to be able to reflect on responses
to the consultation. This work has included the following:
� We have collected a wide range of information from stakeholders, to allow us to
update our analysis. This includes:
o Updated revenue and subscriber data, to inform our analysis of market
definitions and market power.
o A document trawl covering internal and external correspondence from several
parties relating to negotiations over possible wholesale channel supply.
o The detailed cost information required for our analysis of pricing and
profitability.
o Information on the outcome of the February 2009 FAPL auction, and
information on the current distribution of other important sports rights between
different broadcasters.
o Information on the current ownership of specific movie rights, and the process
by which these were awarded.
� We have carried out an analysis of retail markets. This work is described in
section 4.
� We engaged Oxera to carry out a more detailed review of Sky’s profitability,
assessed against suitable benchmarks. The Oxera report is provided at Annex 9,
and discussed in section 6.
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