Competition Commission investigation into movies on pay TV

Over the past quarter, the Competition Commission (CC) has published a series of working papers in its market investigation into movies on pay TV. These have included, amongst others, papers on market definition, the results of CC surveys, the effectiveness of retail competition, the significance of movies to the pay TV market, the availability of movie content, barriers to creating new distribution platforms and Sky’s profitability. The working papers highlight the CC’s thinking in respect of the various issues, without drawing specific conclusions. Notwithstanding this, the CC’s assessment of Sky’s profitability points to possible competition concerns in the market given that Sky appears consistently in recent years to have been earning profits in excess of its cost of capital, and that Sky’s excess profits can no longer be explained by the risk associated with its earlier investments. The CC intends to publish its provisional findings imminently.

DotEcon has been advising a media client in the sector responding to the CC in this investigation.

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