U.K. pay TV probe to eye Lovefilm, Netflix

Competition Commission widens investigation

LONDON — Blighty’s Competition Commission, which is investigating the U.K. pay TV market, is widening its scope to include the impact of VOD providers such as Netflix and Lovefilm.

The industry watchdog provisionally ruled in August that Hollywood studios’ movie contracts with satcaster BSkyB were anti-competitive, creating a barrier to entry for rivals including cabler Virgin Media and telco BT.

But on Wednesday the Competition Commission said it would assess “potentially relevant” developments, such as the arrival of Netflix (which launched in the U.K. and Ireland in January) and the status of Amazon-owned Lovefilm’s business, which has added movie streaming to its rental-by-post model.

BSkyB also plans to launch its own Internet service, which will include Sky Movies and will operate independently from its TV subscription.

“We are considering their implications, alongside other evidence received since the provisional findings, both with regard to our assessment of whether there is an adverse effect on competition and for any potential remedies,” the Competition Commission said in a report.

The news comes after Disney, Paramount, Universal, 20th Century Fox, Warner Bros. and Sony criticized the watchdog in January for failing to accurately measure the competition in the U.K., particularly from Lovefilm and Netflix, which are both vying for exclusive pay TV window rights from film distributors along with rival cablers.

The regulator, which said it would deliver its final report in July, has also published a working paper calling for submissions on how new services may have widened the competition in the market.