caveman_nige
17th July, 2009, 04:32 PM
Link to this provided by Jasmeet_87 but I think it could do with being fully reported here...
The OFCOM report into Pay TV (http://www.ofcom.org.uk/consult/condocs/third_paytv/paytv_condoc.pdf) is published today, and as anticipated it's upset Sky big time, recommending that Sky makes its premium content (sports and movies) available on all platforms at a reasonable price. It's a long report and will take me the weekend to digest, but the good news is that is that it also calls for Sky to sell HD versions of its exclusive sports and movies channels. Here's the piece on HD:
As the paragraphs below indicate, we believe that the restricted supply of HD versions of the channels and primary interactive content does create a risk to fair and effective competition.
On this basis our view is that these should be included within the scope of the obligation.
8.92 Sky objected to the idea of requiring it to license HD versions of its premium channels to other platforms, especially since there is no ?must-offer? obligation on PSBs in relation to HD versions of their main channels or any of their interactive services.
8.93 Virgin Media agreed with Ofcom's observation that the obligation should extend to HD versions of the content. In its response, Virgin Media further explained why it considered HD content as important and why there are no technical or other issues which prohibit the inclusion of HD services.
8.94 Our view is that, on the available evidence, the difference between SD and HD is significant, both as a driver of platform innovation and for the consumer experience.
8.95 HD capability sits at the heart of next generation TV platforms. Sky has recently reduced the retail price of its HD set top box to ?49. HD services from the PSBs are planned to launch on DTT by the end of 2009. Sky, BT Vision and Virgin Media
already offer on-demand HD content.
8.96 HD is becoming increasingly important to consumers, and consumer adoption is accelerating. Sky?s own research shows that 74% of consumers want HD quality and demand for HD is accelerating514 - this is mirrored in take-up of HD: 7% of Sky customers took up HD as at September 2008. In its review of 2008515 Sky states: ?As high definition becomes increasingly established as the new benchmark for video services, we expect the superior range and quality of content offered by Sky+ HD to be a key driver of demand from new and existing customers.?
8.97 Sky has also said on a number of occasions that HD has been the most rapidly adopted service it has ever introduced. For example, it said in The Sky Story in 2007 that:
?We are now transforming the TV viewing experience yet again through the launch of High Definition. We did so in the face of predictions that HD was a needless luxury. It has since seen the fastest take-up of any of our additional TV services to date?
8.98 [ ].
8.99 We accept in principle that we should be cautious about deterring future investment in innovation; innovative services in future which relate to the premium channels covered by the wholesale must-offer would not automatically be included in the obligation. However, based on the evidence set out above on availability of services, and Sky?s own pronouncements, HD appears no longer to be a brand new innovation, and more an integral part of the pay TV landscape. We therefore consider we need to include HD versions of the channels within the scope of the remedy in order to ensure fair and effective competition.
8.100 We acknowledge Sky?s argument that we should treat its HD channels and the HD channels operated by the PSBs in a consistent manner. In particular we acknowledge the importance of the UK originated content shown on PSB channels (see paragraph 3.19 above), and we might well have competition concerns if the PSBs were individually or collectively exploiting any market power associated with this content by restricting its distribution. We do not however see evidence of this:
Substantial effort has been devoted to ensuring that all of the main PSB channels
can be made available on DTT517.
The BBC currently makes available HD versions of its channels on all other platforms which have sufficient capacity to carry them.
There are some restrictions associated with the distribution of HD versions of the
commercial PSBs channels. However, we do not have evidence to consider that these restrictions create a risk to fair and effective competition.
Source: Virgin Media High Definition: OFCOM report tells Sky - hand over your HD (http://vmhd.blogspot.com/2009/06/ofcom-report-tells-sky-hand-over-your.html)
The OFCOM report into Pay TV (http://www.ofcom.org.uk/consult/condocs/third_paytv/paytv_condoc.pdf) is published today, and as anticipated it's upset Sky big time, recommending that Sky makes its premium content (sports and movies) available on all platforms at a reasonable price. It's a long report and will take me the weekend to digest, but the good news is that is that it also calls for Sky to sell HD versions of its exclusive sports and movies channels. Here's the piece on HD:
As the paragraphs below indicate, we believe that the restricted supply of HD versions of the channels and primary interactive content does create a risk to fair and effective competition.
On this basis our view is that these should be included within the scope of the obligation.
8.92 Sky objected to the idea of requiring it to license HD versions of its premium channels to other platforms, especially since there is no ?must-offer? obligation on PSBs in relation to HD versions of their main channels or any of their interactive services.
8.93 Virgin Media agreed with Ofcom's observation that the obligation should extend to HD versions of the content. In its response, Virgin Media further explained why it considered HD content as important and why there are no technical or other issues which prohibit the inclusion of HD services.
8.94 Our view is that, on the available evidence, the difference between SD and HD is significant, both as a driver of platform innovation and for the consumer experience.
8.95 HD capability sits at the heart of next generation TV platforms. Sky has recently reduced the retail price of its HD set top box to ?49. HD services from the PSBs are planned to launch on DTT by the end of 2009. Sky, BT Vision and Virgin Media
already offer on-demand HD content.
8.96 HD is becoming increasingly important to consumers, and consumer adoption is accelerating. Sky?s own research shows that 74% of consumers want HD quality and demand for HD is accelerating514 - this is mirrored in take-up of HD: 7% of Sky customers took up HD as at September 2008. In its review of 2008515 Sky states: ?As high definition becomes increasingly established as the new benchmark for video services, we expect the superior range and quality of content offered by Sky+ HD to be a key driver of demand from new and existing customers.?
8.97 Sky has also said on a number of occasions that HD has been the most rapidly adopted service it has ever introduced. For example, it said in The Sky Story in 2007 that:
?We are now transforming the TV viewing experience yet again through the launch of High Definition. We did so in the face of predictions that HD was a needless luxury. It has since seen the fastest take-up of any of our additional TV services to date?
8.98 [ ].
8.99 We accept in principle that we should be cautious about deterring future investment in innovation; innovative services in future which relate to the premium channels covered by the wholesale must-offer would not automatically be included in the obligation. However, based on the evidence set out above on availability of services, and Sky?s own pronouncements, HD appears no longer to be a brand new innovation, and more an integral part of the pay TV landscape. We therefore consider we need to include HD versions of the channels within the scope of the remedy in order to ensure fair and effective competition.
8.100 We acknowledge Sky?s argument that we should treat its HD channels and the HD channels operated by the PSBs in a consistent manner. In particular we acknowledge the importance of the UK originated content shown on PSB channels (see paragraph 3.19 above), and we might well have competition concerns if the PSBs were individually or collectively exploiting any market power associated with this content by restricting its distribution. We do not however see evidence of this:
Substantial effort has been devoted to ensuring that all of the main PSB channels
can be made available on DTT517.
The BBC currently makes available HD versions of its channels on all other platforms which have sufficient capacity to carry them.
There are some restrictions associated with the distribution of HD versions of the
commercial PSBs channels. However, we do not have evidence to consider that these restrictions create a risk to fair and effective competition.
Source: Virgin Media High Definition: OFCOM report tells Sky - hand over your HD (http://vmhd.blogspot.com/2009/06/ofcom-report-tells-sky-hand-over-your.html)