It seems the ongoing sparring between Sky and Virgin Media is set to continue. The Guardian has published a Press Association item on the announcement by Ofcom to investigate the pay-TV market in the UK. The Ofcom announcement about the investigation can be found at www.ofcom.org.uk.
Ofcom has received a submission from BT, Setanta, Top Up TV, and Virgin Media, which asks Ofcom to investigate the pay TV industry and to consider whether to make a market reference to the Competition Commission under the Enterprise Act 2002.
Pay TV includes subscription and video-on-demand television services on all platforms: cable, digital terrestrial television (DTT), satellite and TV over DSL.
After careful consideration, Ofcom has today announced that it will investigate the pay TV market, including obtaining information from market participants. Following this assessment Ofcom will decide whether to make a market reference to the Competition Commission. Ofcom will also consider whether any concerns would be better addressed using sectoral powers or the Competition Act 1998.
Consumer groups including the Ofcom Consumer Panel and the National Consumer Council have also expressed concerns to Ofcom about one aspect of the pay TV market: the loss of BSkyB channels on Virgin Media's pay TV platform.
Separately, BSkyB has announced a proposal to launch a new pay TV service on the DTT platform, based on new set-top box specifications. On receipt of a licence application, Ofcom would consult on whether to approve the licence variations needed for such a service. In the meantime, the implications of the possible entry of BSkyB into the pay DTT market, including impact on consumers and emerging competition, will be part of the market investigation announced today.
Announcement of investigation into pay TV industry by Ofcom
What is worth noting is that the investigation has been initiated after submissions by several companies, including a number looking to make increasing use of the FreeView platform alongside their TV over DSL products. It emerged in February 2007 that Sky is looking to make alterations to the services it provides on the FreeView platform, in short removing three free channels and to then use special hardware to squeeze four channels into the same bandwidth.
Of course Sky has been far from silent on the matter, as can be read over at www.marketingweek.co.uk. It appears Sky is wanting to complain about Virgin Media and its position in the cable market.
For the average consumer in the UK this battle looks to be a clash of personality and at present, the only ones to suffer a lot are those who have lost channels such as Sky One from their cable packages. Those who have Sky TV satellite services cannot have escaped the extra marketing that is appearing on Sky One now, seemingly lengthening the ad breaks and encouraging people to sign up friends to the Sky TV service. Advertisers though are not sitting back. The BBC has reported a number of major advertisers are threatening to seek refunds for reduced viewing figures on their adverts.