Ofcom Sky ruling could be 'disastrous' for pubs
Licensees could see a drop in sports fans watching live events in their pub after a ruling which will make it cheaper for consumers to watch premium sports channels at home.
Media regulator Ofcom said today Sky must cut the price it charges rival broadcasters for its sports channels.
The satellite broadcaster will now have to sell Sky Sports 1 and 2 for up to 23 per cent less than the current wholesale price, meaning rivals could undercut its prices for live sport.
After its three-year investigation into the Pay TV market, Ofcom concluded Sky has "market power" and "exploits this market power by restricting the distribution of its premium channels to rival pay TV providers".
It added: "This prevents fair and effective competition, reduces consumer choice and holds back innovation and investment by Sky's rivals."
However, as expected, the ruling only applies to domestic subscribers, not commercial premises, such as pubs.
Kate Nicholls, head of communications at the Association of Licensed Multiple Retailers, said this was "not a surprise" but still a "slap in the face for hard-pressed licensees".
"We are disappointed that OFCOM has agreed with us that there are systemic failures in the market but has done nothing to address the problems for commercial customers," she added.
On the issue of demand for watching sport in pubs, she said: "A domestic price war could be disastrous for pubs if customers are tempted to take out a domestic subscription."
But Nicholls said there was a "real opportunity here for Sky to work with the trade to steal a march on its competitors".
"It may be counter intuitive, but a better, more attractive offering in pubs - 3D or HD across the board - could stem the flow," she added.
Ofcom did note that "watching sports channels in pubs is a different experience, from the viewers' perspective, to watching that channel at home."
Sky said it would appeal against the "unwarranted intervention" and suggested it would be to the detriment of consumers.
"This is a marketplace where customers are well served with high levels of choice and innovation," Sky said.
