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About LinkBacksRead more.Regulator lays down the law to Sky and imposes wholesale price cuts on it too.
Read more.Regulator lays down the law to Sky and imposes wholesale price cuts on it too.
RubbsihI can see the benefits to other companies and possibly driving the price down..but I have a moral issue with this and I side with Sky on the same way that I side with Microsoft in their case with the EU. If a company does well in their particular market they should *not* be forced to just give away huge chunks of it..thats just wrong on so many levels. Even more so when its Ofcom who are waving their fingers around..thats not their job is it? Should be the competition commission if it's going to be someone..
Sky should have the right to do what the heck they like with their content - they paid for it and in some cases produced it, and its one of the big things that draws customers to Sky in the first place other than SkyOne.
As far as I see it though, this only applies to Sky Sports 1 and 2? If I were sky, what I would do next is just move the premium and best content away from those channels as fast as possible..create "Sky Sports Premier" or something and sell that at a price that reflects its value. Maybe that would be illegal I don't know but I wouldn't take this lying down (and hopefully they won't either). Most people will likely disagree with me and I know there is a lot of anti-sky feeling on here..but companies should not be penalised for doing well, ugh...add to that the potential loss of revenue for sports clubs since sports will clearly be less valuable to sky one..and its a whole heap of problems.
I think it's great, and you're missing the point - Sky still get to make shedloads cos they're selling the content, not giving it away. Should one company monopolise sport? Should one company monopolise media content at all (be it news or sport)? I'd argue not.
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totally agree with you on that one, why should BT be able to charge less than sky for their channels when sky own all the content on them. yet again its the idiotic regulators trying to take a slice out of the successful companies and force them to share the content thats made them the market leaders in the first place. Its not sky's fault that they pay the most for the rights to sports, if other companies want them then they should stump up and not try and take a free ride off other companiesOriginally Posted by Spud1
Rubbsih
Sky should have the right to do what the heck they like with their content - they paid for it and in some cases produced it, and its one of the big things that draws customers to Sky in the first place other than SkyOne.
As far as I see it though, this only applies to Sky Sports 1 and 2? If I were sky, what I would do next is just move the premium and best content away from those channels as fast as possible..create "Sky Sports Premier" or something and sell that at a price that reflects its value. Maybe that would be illegal I don't know but I wouldn't take this lying down (and hopefully they won't either). Most people will likely disagree with me and I know there is a lot of anti-sky feeling on here..but companies should not be penalised for doing well, ugh...add to that the potential loss of revenue for sports clubs since sports will clearly be less valuable to sky one..and its a whole heap of problems.
The don't get to make "shed loads" as you put it - its a massive reduction in revenue from the sale of those channels on the wholesale market, coupled with the double whammy that their competitors will be able to offer the content to their subscribers cheaper, which, in todays price driven consumer markets will cause Sky to lose customers (and therefore more revenue).
Market regulation is a very difficult area as there is a very fine line to be drawn in terms of the government controlling the markets (which is what this heads towards) and preventing total monopoly. In this particular case there is plenty of opportunity for competition from other companies - they *can* buy the content and *can* offer it to their customers if they want to. Customers have the choice and can purchase their sports from either sky or someone else like BT/VM if they so wish. It's not like we're talking about tiny companies here either - VM and BT (who are the two biggest players that have complained here iirc) are both huge corporations who could invent the money into their sports services if they wanted and get in the customers with what sky currently offer..
marshalex (31-03-2010)
If I'm reading right, this is content exclusive to Sky, content Sky have used their size and buying power to outbid other suppliers for.
Ofcom are apparently trying to level the playing field, so to speak. If you allow one company to dominate certain market sectors, you run the risk of allowing a monopoly.
thinking outside the box, although they've trimmed the price of the wholesale, by forcing Sky to resell it to other suppliers, Sky will actually see an increase in revenue as a result.
Sure, they can buy content at stratospheric prices set by Sky and therefore are unable to offer the same deal that Sky can to it's customers. Not much of choice for the punter, and therefore people go to Sky. I think that's the point of what ofcom's doing here. Where exactly is the downside in this news for me?
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There is little downside to consumers directly...you could expect (*could*) more choice and possibly lower prices.
The reason this is a bad thing is from a moral and social point of view - organisations like OfCom should *not* be allowed to interfer in this way with business. We live in what is ostensibly a capitalist society, and what is supposed to be a free market and free country..this sort of regulation goes too far in my opinion and undermines basic business.
Its about rights to do business and for control of your own company..just like with the Microsoft cases when they have been told they cannot bundle their own software products, with their own software..completely illogical. Where is the incentive to grow as a company if you know that when you reach the top you will be slapped back down? OK so this does sound overly dramatic I know..but its my point of view on the subject..
Well it's certainly not going to have a negative effect..
Like it or not, regulation is a completely logical part of our "capitalist" society because without it companies have very little reason to do anything pro-consumer once they achieve market dominance. As for incentive? Simple - it's called money - and last time I checked Microsoft are, despite regulation, making more of it than er.. everybodyRegulation is a requirement for a truly free market - and Sky won't pack up their bags just because of it, they'll just learn to work within it (just as MS did, just as BT did etc etc) and still pull in shedloads of money
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Sky are only for a free and fair economy when it's free and fair for them:-
The BBC got together with ITV and C4 for project Kangaroo, this was knocked back by the competition commission. Project Canvas, which brought in more partners to lessen the BBC's involvement, was attacked by Sky.
http://www.digitalspy.co.uk/digitalt...er-canvas.html
The BBC supposedly damage independent journalism. I've seen News Corp "journalism" and I'll pass, thanks.
http://news.bbc.co.uk/1/hi/8227915.stm
Sky supposedly wanted to double the prices on its channels when the contract with Virgin Media was up. This came not long after Sky supposedly paid less than they already were when in came time to renegotiate with Virgin Media over the reciprocal deal.
http://www.fusednation.com/general/r...-with-murdoch/
http://allyours.virginmedia.com/fairplay/faq.html
Sky are a monopoly, something that was never envisioned by Capitalism as monopolies are, by themselves, totally in contravention to the practices of a free and fair economy. Capitalism in itself is meant to encourage competition, however this is not always the case as big companies with monopolies will do everything they can to protect themselves.
Free market? Free country?
Ho ho. Ha ha ha. Ho ho ho ho ho. Oh stop it , please, it hurts.
Have you seen the amount of regulation, not to mention red tape, on business these days?
And, from a moral, social and economic point of view, most people will tell you that the operation of market forces do not work effectively at the extreme, and effective monopoly power is as extreme as it gets. That is precisely where regulation absolutely is needed. If it isn't there, capitalist theory predicts market exploitation, poor consumer value and stifled innovation. That's why regulation exists.
And to be fair, Sky knew it was a regulated market, and they know full well that they have a licence to operate under that regulation. Moreover, the legislation under which OfCom operates gives it the duty to ensure consumer intersts are protected and that competition is promoted ...
As for Sky Sports, personally, I don't give a damn. I don't, never have and never will pay for it, and very much doubt I'd watch anything on it if it was a free-to-air channel .... unless the content were to change radically. More specifically, I'm not interested in football, rugby, cricket etc and wouldn't sit and watch it if the monthly fee involved was Sky paying me. So I have no particular interest in this one way or the other. But it does seem as if Sky are exploiting their dominance, and the size of their bankroll, to exploit consumers and limit choice. And if so, then OfCom is quite right to act ..... if a 'little' slow about it.
Lets think about other things then... there used to be a thing called the "net book agreement", publishers set the price shops HAD to sell for. That meant you could not run a business where you sell more books at a lower margin. Publishers have a monoploy as well, no one else produces that book etc. Same with CDs/DVD/Games they are unique content wise. Do you think all of these should be sold for the recommended retal price?
BT has a monopoly on data wires to most peoples houses, should they be required to give access to other suppliers?
When there is a monopoly on an (important) commodity, the supplier of it is normally required to split there business into two parts, wholesale and retail, the retail arm has to pay the wholesale arm the same price as everyone else. This allows for fair(er) competition in retail, and prevents wholesale subsiding retail to stop undercutting competition.
The question is sport an important enough unique commodity? Like wise with films.. That is the question. The OfCom says yes it is (I might disagree).
(\__/) All I wanted in the end was world domination and a whole lot of money to spend. - NMA
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Funny how Sky will complain about this and say it's unfair while at the same time complaining about everything the BBC do for being anti-competitive.
Sky themselves have taken advantage of of Ofcom regulation to offer broadband & phones services via BT copper and they offer it at cheaper prices than BT.
I think this is a better idea than the silly one of splitting football packages up, all that did was meant that people had to pay a monthly sub to 2 companies (Sky & Setanta/ESPN) which probably cost more than a single sub to Sky.
However to protect their market share Sky get to just up their bids and then up the prices to customers, that's why i left Sky. I didn't even take the sports packages yet their basic packages kept increasing in amounts that i didn't think were warranted.
regulation that benefits me and negatively affects my competitors is good
regulation that doesn't benefit me, no matter what it does to my competitors is bad
That's where Sky is coming from.
That's the whole of point of Ofcom, mate.
When they see a monopoly developing to the point where it affects competition, they try do stuff to increase competition.
Yes, Sky might angry that they can't be a monopoly but hey, that's the choice they made when they entered the UK market. Every other UK business is on the same boat.
For a variety of factors, Sky does have an effective monopoly. People have argued above that others could outbid sky for the footie, but could they? really?
BBC clearly can't - and shouldn't try to - outbid pay tv channels for such high cost sport. ITV and other terrestrial channels clearly haven't got the cash.
Can't remember clearly, but wasn't freeview originally a pay tv thingy that collapsed as it couldn't compete? Or was that for non-premiership footie?
I can only presume that Virgin has not got the cash or ability to make this work either. They haven't got the physical coverage to combat Sky (seems to be only about 50%), so the revenue they could get if they did outbid Sky would presumably end up as commercial suicide? Setanta has shown that others can't muscle in either even if the content is split up.
(I'd be interested in seeing figures comparing Sky tv income vs Virgin tv income vs License fee used for TV. I couldn't find it easily on a quick google, I suspect as figures would tend to be for the entire company including phone, broadband etc... )
I think the question is simply whether football/sport should be seen as a commodity that shouldn't be monopolised? If BT has to allow access to their network for Broadband when they have an effective monopoly, why shouldn't Sky if football is seen as that important? Personally, I'm with Saracen - I couldn't care less about football or sport in general. I do realise though that I am in the minority as a male, and clearly some people care a lot about it, particularly football.
EDIT: oh, I forgot to mention: I personally really dislike the idea of so much media being controlled by one person, particularly when that person then uses that media to conduct such a continued attack against the BBC. To be fair Sky have innovated with Sky+ etc..., but I detest the hypocritical stance they took against project canvas etc... as others have mentioned above.
Last edited by GaryRW; 31-03-2010 at 02:09 PM.
Then you obviously didn't understand what the issue was. MS didn't do well, they just gave something away for free, destroying the business of others, sabotaging sales, while stifling innovation and competition.Rubbsih
Are you seriously suggesting you can't see the problem here?
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