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U.K. regulator rules in BSkyB’s favor

Hollywood deals are not anti-competitive, says org

LONDON

BSkyB, the Rupert Murdoch-controlled U.K. paybox, has received welcome news from local regulators — the Competition Commission ruled that its deals with Hollywood studios are not anti-competitive.

A provisional decision, announced last August, suggested that the satcaster’s contracts with Disney, Warner Bros., Paramount, 20th Century Fox, Sony Pictures and Universal Studio were restricting competition.

But the bow of Netflix in Blighty in January and Amazon-owned LoveFilm’s decision to add an online video-on-demand service to its rental-by-post model led the watchdog to change its mind.

The regulator concluded that U.K. consumers who want to pay to watch movies at home are no longer so dependent on Sky Movies.

Competition Commission chairman Laura Carstensen said, “Competition between providers of movie services on pay TV has changed materially and consumers now have much greater choice.

“Consumers’ choice of pay TV platform can more easily be decoupled from their choice of pay TV movie service.

“As a result, Sky Movies no longer provides Sky with the advantage that it used to have when competing with other traditional pay TV platforms, like Virgin Media or BT Vision.”

However, the regulator said that competition in the overall U.K. pay TV market was ineffective.

But the Competition Commission said it could not act because the scope of its inquiry was limited to films in the first subscription pay TV window.

BSkyB welcomed the ruling. A spokesman said, “We have long argued that U.K. consumers are well served by strong competition between a variety of movies providers.

“We remain committed to innovating for customers so that we can make Sky Movies even better, building on developments such as Sky Anytime+ and Sky Go.

“At the same time, we’re focusing on the launch of Now TV, which will offer consumers even more choice in this vibrant sector.”

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