August 28, 2009

Sky and Ofcom

There was an interesting article in The Guardian this week about BT Vision. BT's pay TV service (basically Freeview plus IP TV) has struggled to lure paying customers away from Sky and Virgin and currently serves a TV customer base of 433k - Sky has more than 9m and Virgin 3.5m. (Any HD offering on the service is constrained by BT's copper-based ADSL broadband btw.) Anyway, what interested me in the article was a comment made by the Chief Exec of BT Retail regarding the regulators and the double-standards of some of Sky's statements regarding the Ofcom report earlier in the summer:
Ofcom wants to impose a complicated pricing formula which it claims will allow Sky to make a decent margin from selling on its sport and movie channels, even after the cost of acquiring the rights has been taken into account.

"It would not make Sky sell at a loss," Patterson [Chief Exec of BT Retail] says. It is ironic, he adds, that Sky has built a broadband business with more than 2 million customers (BT has close to 5 million) by piggybacking on BT's own network, following a deal imposed by regulators, but is unwilling to accede to Ofcom's writ by making its own content available to BT and others.

I hadn't thought of it like that. Sky has talked up the investment made by the company in securing its premium TV content monopoly, but has conveniently ignored the similar situation in the broadband market with BT having made a huge investment and then having to bow to regulatory power to open it up to the competition. Which Sky has been one of the main beneficiaries of.

Funny that...

16 comments:

Media Boy said...

SDid you know that Patterson [Chief Exec of BT Retail] was an Telewest worker before he join BT.

lee said...

Oh come on though...Rupert Murdoch!! Hardly surprising view from Sky? "ohhh we are so hard done by, wah wah wahhh"

We all remember Robert Maxwell's empire's downfall. I wonder if Murdoch can swim...

ChrisD said...

James Murdoch is addressing the Edinburgh Television festival tonight. It was 20 years ago since his father gave a similar keynote speech that predicted the proliferation of multiple TV channels, on-demand TV and HD. They were talking about it on the Radio this morning. The views seemed to be that Sky had invented these things and were now being plagued by "Jonny-come-latelies" like Virgin and BT and how unfair it was!

It was also being predicted that Murdoch Jnr will use the speech to take a pop at Virgin... oh and Oftel who are "interfering in areas they shouldn't be".

Nialli said...

Sky do seem to enjoy taking credit for pioneering, where to my eyes what they really mean is "taking innovation from US companies and being first in the UK with it", which isn't the same thing.
Before Sky+ there was Tivo, but the way Sky talk of it they invented the PVR. Before Sky multi-channel there were the multi-channel cable services in the US. Now we get the same with HD and no doubt video on demand will be a great Sky invention if they ever sort that out.
Genuine innovation from Sky
But Murdoch Jnr is right if Oftel are interfering where they shouldn't - Oftel was closed in 2003! Ofcom is the current watchdog.

Nialli said...

As a footnote, which monopolistic company is Murdoch Jnr referring to here? "***'s operation is throttling the market, preventing its competitors from launching or expanding their own services. We seem to have decided to let independence and plurality wither. To let *** throttle the market, and get bigger to compensate."
A) Sky, or B) BBC ? It appears that not all monopolies are equal

tvsersity said...

Murdoch (Snr or Jnr) never cease to amaze with their spectacularly one sided world views. I read with much hilarity Murdoch Jnr's attack on the BBC, claiming it made life difficult for 'independent' (coming from the home of Fox News!) news sources to sell online news. Well we can all be VERY glad we have the BBC, and for free too. Heck I'd pay for the BBC News site any day rather than read sewage like The Sun Online or anything from the camp of sleaze and right wing propaganda than is Fox/Murdoch/Sky.

It's really too bad the UK government hasn't been more pro-active in limiting Murdoch's ability to control so much content here. He runs was is virtually a monopoly and charges/scams accordingly. I can only imagine how much BT would *love* to kick Sky off it's ADSL network.

Looking to the future though and with a fibre to the home network (or even fibre to the cabinet) years away for BT I can see Sky's dominance slowly fall. As people moves to IPTV and on demand Sky's will be unable to compete on will face controlling an increasingly outdated platform.

Carol Steele said...

It would appear to me that this blog is rapidly degenerating into an anti-Sky, hate-Murdoch blog instead of the honourable campaign to get more HD onto the Virgin platform.

lee said...

Carol - I can certainly see how it may appear that way, however, if it helps, I thought the Murdoch empire was evil BEFORE I came onto this blog!! :p

Nialli said...

I think you'll find I've always held some of Sky's business practises in contempt, whilst admiring others. Murdoch Jnr's anti-BBC and Ofcom tirade struck me as hypocritical and self-serving, hence my comments on it.
I don't hate Sky nor News Corps, I just feel they overstep the mark at times of what is fair business practise. No business is whiter than white, not Sky, not Virgin, not the BBC, but there are definitely some shades of grey darker than others.

Nialli said...

And my final comment on the matter http://www.newsbiscuit.com/2009/08/30/murdoch-claims-british-media-not-being-run-solely-for-the-benefit-of-our-family/

lee said...

LOL, that last bit was satirical and made up - but it's funny, because it works!!

And I think you're quite light on Newscorp - good job we don't get the slightly right-wing Fox News over here (one channel VM doesn't carry that I'll never be voting for!!!)

Sniper in the Trees said...

Isn't there a certain element of hypocracy creeping in here? Murdoch's "Evil Empire" and all that rhetorical claptrap.... Isn't it Dr Evil's content that you're all clammering to get access too? Remember, once you finally bring him & Sky down (on the same day Hell freezes over incidentally), the Sky content you're all so eager to see on VM will be no more... So none of us will have the HD content, Sky or VM!!

Sounds rather like "If we can't have it, then nobody should" sort of mentality to me....

I agree with Carole... We're Ex VMHD people who, just like you, wanted more HD... So.... We went out to the free market and got it!! FREE MARKET... ie We have our product, you have yours...

BT is a post-nationalised company which inherited the taxpayer's communications network... Nothing like Sky's situation!! Of course BT should be regulated.

lee said...

If one is being really harsh - one could argue - why are Sky customers interested in whether we get more HD or not? lol

To me, it also goes back to the arguement that yes Sky have currently more HD channels, but miss other aspects like the broadband and on-demand content VM offer. So, like Sniper suggests - it's a free market so both sides have pros and cons.

My issue with the ethics of broadcast and print of Newscorp have been the same since I understood them, and have nothing to do with Sky's HD content or otherwise; however my feelings on how Murdoch's business practices clearly do extended to Sky, in that I think they are crying wolf now they are having competition in areas they didn't before.

Nialli said...

It's not a "free market", that's the point. Nor is anyone saying "If we can't have it, then nobody should".
And I don't think I've ever been under the illusion that the tiny voice of this blog is ever going to do anything significant apart from perhaps make Virgin aware that there is a real demand for HD on the cable platform.
But as this is my personal blog and Murdoch Jnr's comments really wound me (and many others) up, I decided to comment here. There's no campaign against Sky - as I've said elsewhere I'm not anti-Sky and at times I've been accused of being anti-Virgin and pro-Sky.
If you have Sky and are please with the service and the price you pay, that's great. I'm grateful that Sky customers still visit this blog, but if it really does descend into a "my supplier's better than yours" site I'll shut up shop.

ChrisD said...

I don't think many of us on here are Sky haters or want Sky to crash and burn. In my case it's a frustration that I want to pay Sky for access to their HD services but I can't because they won't sell them to my TV provider (VM). And the reason is that because Sky want me to leave VM and join them to get those services. The point is, both ways I would end up paying them for their services, but in the second case harm is done to their competitor too by me leaving. These are part of the anti-competitive practices that Sky engages in and what we complain about!

Sniper in the Trees said...

I'm sure the majority of you aren't Sky haters...Sky do produce the best sport lot's of other great content. What I'm saying underpins what Nialli said about this being a platform competition.. I'm ex-VM and used to really enjoy the VOD and the broadband was (is) second to none.

The thing is, both platforms have their USP's depending on what the consumer most desires. The people on this forum seem to expect Sky to relinquish their USP at a loss however, to benefit the competition.. I just don't see why this is fair or acceptible behaviour. That's my gripe... As a businessman I can wholeheartedly see why Sky want to protect or at least make a profit from mtheir USP!!