BSkyB could win reprieve on regulation of movie rights

The Competition Commission has decided against regulating to reduce BSkyB’s grip on the UK pay TV movies market, according to a report in the Mail on Sunday newspaper.

The commission’s preliminary report, due to be released this week, is expected to conclude that the entry of online movie rivals including Netflix and Lovefilm has reduced the need to regulate the market by weakening BSkyB’s dominance, according to the report.

The Competition Commission said in March that it would look again at its earlier finding that Sky’s first subcription pay TV window deals with Hollywood studios were anti-competitive in the light of the development of the online offerings.

Media and telecoms regulator Ofcom warned the commission in April not to overestimate the impact of Netflix and Lovefilm on the UK market, arguing that Netflix and Lovefilm’s long-term deals with the studios largely covered the second subscription pay TV window, and Sky remained dominant in rights to first subscription pay TV window movie content. However, the Mail’s story, if true, indicates that the Competition Commission has decided that the impact of the online services is sufficient to weaken Sky’s hold on the market.

The commission is expected to publish its final report in July.

Separately, News Corp chairman Rupert Murdoch moved to squash a report in the Daily Telegraph newspaper that the company was considering spinning its UK newspapers off into a trust or selling or part of its stake in them. There has been speculation that News Corp might consider spinning off its UK newspapers in order to secure its grip on its more profitable pay TV activities in the wake of the phone hacking scandal, and possibly, in the future, to renew its attempt to take full control of BSkyB.