16 Jan 2010 Cost of watching live football and cricket to be slashed in price war

[Watchman]

Cost of watching live football and cricket to be slashed in price war


The cost of watching live football and cricket on television is set to be slashed as Britain's pay TV industry faces one of the biggest shake-ups in its 20-year history.


By Rupert Neate
Published: 9:00PM GMT 16 Jan 2010
The regulator said last June that it was seeking to reduce Sky's dominance of Premiership football Photo: GETTY

BT is preparing to start a price war that will see it sell subscriptions to watch the English Premiership and Ashes cricket for more than a third less than its rival BSkyB.

Virgin is also planning to undercut the satellite broadcaster which could lead to Sky losing hundreds of thousands of viewers.

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Ofcom, the communications regulator, is expected this week to agree that Sky will have to drop the prices it charges its competitors for premium content, including Sky Sports and Sky Movies.

The regulator said last June that it was seeking to reduce Sky's dominance of Premiership football by forcing it to open up its content to competitors at lower prices.

BT has indicated to The Sunday Telegraph that it will charge its customers as little as £15 a month for Sky Sports 1, compared to the minimum £25.50 its rival charges for the service. Most Sky subscribers pay £36 a month for a package of its sports channels and other basic content.

"I'm definitely looking forward to the decision [by Ofcom]. The case is crystal clear – the customer benefits if they get more choice," said Gavin Patterson, chief executive of BT Retail, adding that the company would offer Sky Sports packages to its customers for a price "somewhere in the mid teens".

The price cuts could mark a sea-change in Britain's pay TV market, where BT and Virgin Media have struggled to gain a significant toehold.

While Sky boasts 9.5m subscribers, Virgin has 3.7m customers and BT Vision, which was launched in December 2006, just 436,000. BT has previously set a target of 3m customers.

Mr Patterson said the status quo where Sky dominates the market and requires most of its retail customers to sign up to other services before they are allowed to watch premium sports is "unfair".

At present, Sky can charge its rivals high prices to broadcast its Sky Sports and Sky Movies channels, and it is not obliged to make the content available to everyone.

BT hopes it will be able to offer the lower prices in time for the start of the next football season in August.

Sir Richard Branson, whose Virgin Group holds a 6.5pc stake in Virgin Media, has said he expects the price of Sky Sports 1 to fall by 20pc.

Ofcom is expected to make its decision on pricing at a board meeting on Tuesday, although a formal announcement will likely be delayed until the end of March. Industry insiders are convinced that Ofcom will order Sky to slash its prices.

Such a move would infuriate the company. Sky's chief executive, Jeremy Darroch, has accused BT and Virgin of trying to piggyback on the back of his company's success and the risks it took building a sports and television subscription service.

"BT and Virgin Media do not deserve to be handed a reward at Sky's expense for their repeated failure to invest," Mr Darroch said. "It defies belief that Ofcom expects Sky to lower its wholesale prices to compensate for the higher costs of less efficient platforms.

"Sky invests and takes risks to create television channels of the highest quality. We spend over £1bn a year so viewers can enjoy the movies and sports coverage they expect," he added.

It is understood that Sky will launch a legal challenge if Ofcom forces it to lower its wholesale prices.

An Ofcom spokesman said: "In June 2009 we published a consultation on pay TV where we set out a range of proposed wholesale prices for Sky's premium channels. We are now considering the responses to the consultation and aim to publish our final statement at the end of March 2010."

In its consultation, Ofcom proposed cutting the price at which Sky sells Sky Sports 1 channel to its rivals, such as Virgin Media and BT, to between £9.41 and £11.24, compared to £13.48 at present.

Sporting bodies including the Premier League, the England and Wales Cricket Board and the Rugby Football Union have warned that the move may significantly affect funding provided to sports clubs up and down the country and threaten the nation's future sporting success.

 

[shOUTloud]

This is interesting. I wonder how it is going to pan out.

 

[elephanto]

This is interesting. I wonder how it is going to pan out.

Offhand without reading deeper or checking other sources of info, if Sky were to be cut down to size by other media competitors than the effect will percolate down to affect the whole business model.

Who will gain - media competitors, consumers

Who will lose - Sky, BPL fat cats from Organizers to Clubs to fucking millionaire soccer players. They had it so good from 1992 (start of EPL) to today - almost 20 years.

If forced to compete, Sky would pay less to BPL - or would BPL fat cats let all comers come & bid & mak even more ?

We wait & see

 

[Ramseth]

Funny, Singapore's prices go up as competition heats up.

 

[Watchman]

There remains internet football . No need live but you can watch after a day or so .

 

[Areopagus]

Makes you wonder if perhaps the two companies "competing" are from the same ownership???

 

[Ramseth]

Makes you wonder if perhaps the two companies "competing" are from the same ownership???

I wonder why you wonder. They are both Temasek-majority GLCs. If not, then I worry. What if our Telcos and TVcos are owned by Citibank or AIG? Everyday trying to sell us credit cards and insurance policies?