Competition Commission reverses earlier findings and concludes no remedies are needed in "Movies on Pay TV" investigation

On May 23, 2012 the UK Competition Commission issued revised Provisional Findings in its investigation of Movies on Pay TV. The CC had earlier concluded, in its first Provisional Findings of August 2011, that competition was ineffective in the supply of “premium movies content” via pay TV to UK consumers, and remedies were required to address these concerns. This view has been reversed in the new Findings, which conclude that remedies are no longer needed. The CC recognises that the increase in broadband penetration and the development of services delivering content over broadband are likely to impact pay-TV markets significantly. The start of subscription VOD services by Netflix and Lovefilm is a precursor to potentially major changes to competition in delivering movie content in the UK. The CC therefore concludes that there is at this point no need for intervention in the way that premium content is purchased by Sky from the Hollywood studios, and in the terms of the wholesale price at which Sky resells the content it has purchased to rival retailers. A CRA team advised Sky throughout the investigation, with a number of submissions on the extent to which the wholesale price of Sky Movies could be deemed an impediment to effective competition, the rationale for the sale of rights by multiple studios to Sky, and the effects of remedies.