Pay TV phase three document - Stakeholders - Ofcom

Pay TV phase three document – non-confidential version
the existence of the existing commitments, and the importance of understanding how
these play out in practice before considering our approach to future commitments.
However, we are now in a better position to assess what the effect has been of the
current commitments: they have facilitated the entry of Setanta into the market, and
the development of new retail packages, in particular entry-level packages on non-
Sky platforms. Partially offsetting this, some existing consumers on Sky’s satellite
have had to purchase an additional subscription at a price of at least £9.99 per month
in order to continue being able to view all the FAPL matches. 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
12.41 The commitments offered by the FAPL to meet the concerns expressed to it by the
Commission sought to improve the scope for ex ante competition for the rights to
permit greater competition in the acquisition of those rights and to improve the
accessibility of content for TV, radio and new media operators. The Commission’s
objective in accepting the commitments was to ensure that the arrangements did not
restrict output or result in competitors being foreclosed from the relevant markets, to
the detriment of consumers. However the greater competition which resulted from the
commitments and the consumer benefits which have resulted from the Commission’s
action ensuring Setanta’s entry into the market do not at the time of writing appear to
be sustainable, at least in their current form: as we set out in section 3, Setanta has
been unable to establish a lasting position in the market.
12.42 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. 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:
� 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 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 crossplatform
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 were 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.
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