Pay TV phase three document - Stakeholders - Ofcom

Pay TV phase three document – non-confidential version
Introduction
4.5 In this section we define the markets that are relevant to our consideration of whether
there is a risk that fair and effective competition in the provision of licensed channels
including premium content is not occurring and will not occur. We discuss in turn:
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� The relevant economic markets that we seek to define.
� Our overall approach to market definition.
� The wholesale market for premium sports channels.
� The retail market for premium sports channels.
� The wholesale market for premium movies channels.
� The retail market for premium movies.
Which markets do we define in this document?
Our position in our Second Pay TV Consultation
4.6 Our First Pay TV Consultation, in September 2008, put forward initial market
definitions for a number of markets:
� Wholesale markets for premium sports channels and premium movies channels.
� Wholesale markets for basic tier channels.
� Retail markets for premium sports channels and premium movies channels sold
to residential customers.
� Retail markets for basic tier channels sold to residential customers.
4.7 We also assessed whether the above retail markets would be likely to be platformspecific
and took the view that they would not be.
4.8 Our Second Pay TV Consultation focused on competition concerns relating to the
wholesaling of premium channels. As a result, in our Second Pay TV Consultation,
we progressed our initial market definitions for wholesale premium channels and
consulted on:
� Wholesale markets for “Core Premium Sports channels”, defined as wholesale
supply of Sky Sports 1, Sky Sports 2 or Setanta Sports 1, as well as High
Definition (HD) versions of these channels.
� Wholesale markets for “Core Premium Movie channels”, defined as the
wholesale supply of channels including first-run movies from the Major Hollywood
Studios in the first pay TV window, as well as HD versions of these channels.
Respondents’ views
4.9 Sky said that our focus on establishing upstream market power was misplaced as (a)
it was unlikely to be a necessary condition for the types of issues that concerned us
and (b) proper analysis of the relevant downstream market would remove our