Digital TV News

Sky fights ruling to cut price of its sports channels

Wednesday 31 March, 2010

By Becca Talbot - becca@consumerchoices.co.uk

Viewers won’t have to pay expensive subscriptions to watch Premier League football and other sports on the Sky Sports channels anymore, following a decision by regulator Ofcom.

Industry regulator Ofcom has ruled that satellite TV giant Sky must offer the premium sports channels Sky Sports 1 and Sky Sports 2 to other digital TV providers at a reduced price. But Sky is to launch an appeal against the decision.

The decision comes after a three-year investigation into the pay TV market, and means consumers will be able to watch Premier League football and the Ashes cricket without needing a satellite dish or a Sky subscription.

Ofcom is forcing Sky to reduce its wholesale prices for the two channels from £13.88 to £10.63 per subscriber, so rival providers such as Virgin Media and BT Vision can charge their customers less for access to the channels.

The new pricing will come into effect immediately, but Sky will appeal to the Competition Appeal Tribunal against the decision, which it labels an “unprecedented and unwarranted intervention.” It has six weeks to lodge the appeal.

A Sky spokesman said: “This is a marketplace where customers are well served with high levels of choice and innovation. Consumers will not benefit if regulators blunt incentives to invest and take risks.”

Rival provider BT Vision had promised to cut the price it charges customers for a subscription to Sky Sports, despite being “disappointed” by the ruling.

Gavin Patterson, BT Retail’s chief executive officer, said: “We aim to offer Sky Sports 1 and 2 at lower prices than those which have been available. We hope to bring them to the market in time for the new Premiership football season but that will depend on Sky now complying with Ofcom’s decision.”

“However, Ofcom should have gone much further than it did. It has dropped movie channels, which should have been included. It should also have included all Sky Sports channels, not just two,” Patterson added.

BT, which has it’s own digital TV service - BT Vision - is concerned that Sky may be able to get around the decision by moving coverage of major sporting events to channels not covered by the ruling.

Jon Ingram, operations director at Digitalchoices.co.uk, said: “Arm chair sports fans will welcome Ofcom’s decision, as there will now be a wider choice of platforms to watch Sky Sports on. But it remains to be seen whether the decision will prompt providers into offering competitively priced bundles for the channels.”

As part of the ruling, Ofcom has granted Sky permission to launch Picnic, a service to bring pay-TV channels to Freeview, but only if Sky agrees to the sports channels ruling.

The proposed Picnic service would see Sky’s three free-to-view channels on Freeview - Sky News, Sky3 and Sky Sports News - replaced with a subscription TV service, meaning Freeview homes could have access to premium Sky channels, at a lower price.