Pubs left out of Sky price cut plans

Pubs have been left out in the cold over the proposed deal to force Sky to slash its prices to other broadcasters.

And pubs could be further hit as the deal could give an estimated 10m Freeview users access to cheap Sky Sports channels and Premier League football.

Media watchdog Ofcom ruled that Sky must slash its wholesale prices to rival broadcast platforms, such as BT and Virgin Media, by 23.4% to £10.63 a month.

The move could see broadcasters offering Sky Sports for as little as £15 a month to domestic users — Sky customers currently pay upwards of £25.50 for the channel, and most of them pay at least £36 a month for a package including sports and movies.

But the Ofcom decision refers to the domestic market and does not affect commercial platforms meaning cash-strapped customers may choose to stay at home instead of going to the pub to watch the football.

"The wholesale must-offer obligation will not include supply for onward retail to commercial premises," said Ofcom. "The nature of competition in pubs and clubs is very different from that for residential consumers."

But Ofcom did note concerns raised by the Association of Licensed Multiple Retailers over commercial prices and said: "We do however consider that this is an issue that may be relevant to a future analysis of the sale of Premier League rights."

It added: "Consumers are also likely to benefit from the availability of smaller, lower-priced TV packages including Sky Sports 1 and 2, and a greater range of bundles combining pay TV, broadband and phone services."

However, Sky said it would appeal. "This is a marketplace where customers are well served with high levels of choice and innovation," it said. "Consumers will not benefit if regulators blunt incentives to invest and take risks."

Slap in the face​

The Association of Licensed Multiple Retailers head of communications Kate Nicholls called Ofcom's ruling "a slap in the face for hard-pressed licensees".

"Ofocm has clearly stated that Sky has market power, which it is exploiting to distort competition and reduce consumer choice. Commercial customers are at the sharp end of that but are left out in the cold when it comes to the recommended interventions.

"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: "Today's ruling means that Sky will be forced to compete at a domestic level, but we hope that it will not turn its back on its commercial customers.

"A domestic price war could be disastrous for pubs if customers are tempted to take out a domestic subscription. There is 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."

BT Retail chief executive Gavin Patterson also said he thought pubs should have been included in the deal.