Sky Picnic - or Payview?
Brian Butterworth published on UK Free TV Until this week, a Picnic was either a peanut (with nougat, caramel, biscuit and puffed rice) chocolate bar, or something that Yogi bear stole from campers in Yellowstone Park.
Ofcom have finally - after eight months of procrastination from Sky, started a consultation about turning part of the run-away success that is Freeview into another pay TV service
Sky's proposal is to:
- remove Sky News, Sky Sports News and Sky Three from the Freeview service;
- provide "Sky Sports 1" as a full-time premium pay channel
- provide "Sky Movies 1" in non-HD format from 6pm to 6am as a premium pay channel
- provide Sky News for one hour from 6pm to 6pm as a basic pay channel
- provide Sky One for 11 hours from 7pm to 6am as a basic pay channel
- provide a "third party factual channel" for twelve hours from 6am to 6pm
- provide a "third party children's channel" for twelve hours from 6am to 6pm
The actual cost to the subscriber is not clear, but the "usual" Sky practice of making you pay for basic channels (here, Sky One, Sky News and the two third-party channels) before you can access the "premium content" will be expected, as will a "special price" for subscribing to both Sports 1 and the Movie 1 channels. It seems unlikely that a subscription to a single Sport or Movie channel would cost less than 18 per month, and perhaps 25 for both would match Sky's current pricing.
It should be noted that Sky do not currently have a "Sky Movies 1" service as they changed all their non-HD channels to be named channels Comedy, Action/Thriller, Family, SciFi/Horror, Classics, Indie, Modern Greats and Drama...
It should be noted that the proposal is to use the NDS encryption system that is used by BSkyB's Sky Subscribers Services Ltd on the "Picnic" service mean that it will be 100% incompatible with both Top-Up TV and Setanta Sports, and would allow the NewsCorp owned NDS to run the encryption services on both satellite and terrestrial broadcasting.
Ofcom think there are three ways of responding to the Sky "Picnic" proposal:
1. Unconditional consent
This would be because the "increase in programming" and "associated consumer benefits" would overcome any "competition concerns". Quite how removing three channels from 12 million homes so a very small number of people who cannot subscribe to Sky directly or though Virgin TV can watch Sky One in the evening, a movie channel that does not existing and a single Sports channel, is anyone's guess.
2. Consent with conditions
This would allow the service to be run with the removal of Sky News, Sky Sports News and Sky Three from Freeview, but with NGW (the multiplex owner) and Sky having to commit to making all of it's channels avaiable on a all-comers "wholesale" basis and that a "compatible" encryption system (called CA, not the NDS system) be used to allow competition.
Sky would also have conditions imposed that would not allow it to use the "Picnic" system as a wreaking tactic to undermine Freeview and force viewers who want it content onto the Sky platform.
3. Reject the proposal
Based on the requirement of free competition, Ofcom could decide that Sky is abusing it position in the pay TV market by attempting to reduce the attractive nature of Freeview simply to push viewers onto the satellite pay TV platform, for example, by making the Picnic service very expensive in comparison to satellite.
The consulation questions
If you wish to respond to these questions, you must use this form by 5pm on 14 December 2007. The Ofcom questions are:Competition assessment
1. To what extent do you consider that DTT, DSat, cable and IPTV are in competition with one another for subscribers of pay TV services either at present or in the future?
2. To what extent do you consider the Proposal is likely to deliver benefits to the consumer?
3. To what extent do you consider that there is scope for sustainable competition in pay TV on the DTT platform and, more broadly, across all pay TV platforms?
4. What are likely to be the key aspects of competition between providers of retail pay TV services on the DTT platform? E.g. what is the role of premium sports and movies content?
5. Do you consider that if Sky were to become the only provider of pay TV on the DTT platform it would be likely to have a significant detrimental effect on competition in the long term? How might this affect the development of other platforms for the delivery of pay TV services?
Section 4: Other policy considerations
6. To what extent, if at all, do you consider that the Proposal would be likely to lead to any of the public policy concerns outlined at Section 4?
7. Specifically, to what extent do you consider that the Proposal would be likely to lead to consumer confusion?
8. To what extent do you consider that it is beneficial for consumers to be able to obtain Sky and existing DTT pay TV content without having to purchase separate STBs?
9. Do you consider that the Proposal might lead to any additional public policy concerns?
Section 5: Options
10. If Sky becoming the only provider of pay TV services on the DTT platform were likely to have a significant detrimental effect on competition, do you consider that it is possible to address this through a set of additional conditions and/or directions? If so, what form should those conditions/directions take?
Responding to : Proposed BSkyB digital terrestrial television services.
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