David Prosser: Sky's future is not quite so bright


Outlook: Sky is not a company for which people often feel too sorry.

But it's hard not to have some sympathy for the broadcaster, as Ofcom tries to force it to sell more premium content. After all, Sky invented the UK pay TV market 20 years ago, took all the risk in turning it into a profitable concern and, having established it as just that, is now being told it must share the spoils with rivals.

Those rivals, led by BT, claim that Sky is more or less refusing to sell any of the content in which it invests so heavily – spending around £1.3bn a year on sport and film rights – so that viewers who want to see such stuff have no choice but to invest in a Sky subscription.

Nonsense, says Sky, which says it will do a deal with anyone on content if the terms are right, but that having made such a large bet on pay TV, it isn't simply going to give the stuff away now the gamble has proved to be a winning one.

Ofcom takes BT's side, concluding yesterday that Sky is not serious about negotiating wholesale deals; that its ambition to drive sales of its platform is so all-consuming that it makes it almost impossible for rival platform providers to buy any of its premium content. The regulator says it has evidence to prove just that.

The question, then, is having spent 20 years establishing this market, should Sky be forced to help its competitors? Equally, should Ofcom allow Sky to retain the power to make or break its rivals in perpetuity – if that's bad news for consumer choice and product innovation – as it almost certainly is?

With that debate in mind, from Sky's perspective at least, the collapse of Setanta UK could not have come at a worse moment. While the Irish company's problem was a different one to the wholesale issue addressed by Ofcom yesterday, its demise will fuel the perception that Sky is too powerful.

It is at least worth noting the speed with which ESPN, the Disney-owned sports broadcaster, stepped in to pick up Setanta's rights to Premier League football. It, for one, doesn't appear to be intimidated by Sky's current market strength. But practically speaking, it's unrealistic to expect a broadcaster starting from scratch to outbid Sky for future content, in sports or elsewhere.

If there's no hope of competition on content rights, and Ofcom's evidence on Sky's reluctance to embrace wholesale distribution is really so compelling, it has little choice but to step in. Sky will no doubt challenge the watchdog at every turn, but it has had this market to itself for some time. Ofcom, in any case, points out it could make £250m a year from new wholesale deals, which would help with any loss of subscription income.

Watch this space: this is going to be quite a fight. And you won't even have to pay Box Office to watch it.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
News
peopleIt seems you can't silence Katie Hopkins, even on Christmas Day...
Arts and Entertainment
Left to right: Stanley Tucci, Sophie Grabol and Christopher Eccleston in ‘Fortitude’
tvSo Sky Atlantic arrived in Iceland to film their new and supposedly snow-bound series 'Fortitude'...
Life and Style
fashion
Arts and Entertainment
tv
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Day In a Page

Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there