OFCOM final decision on Pay TV review - Picnic to be allowed and wholesale prices set
mlt11
Posts: 21,092 Forum Member
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Per Sunday Times, two key points:
1) Sky will be allowed to sell Pay TV channels on DTT ("Picnic")
2) Wholesale price for Sky Sports 1 will be "close to £10.50 .... about a 20% cut"
NB:
- Current wholesale price of Sky Sports 1 (paid by VM) is £13.48 so a 20% cut would be £10.78
- OFCOM was consulting on a range between £9.41 and £11.24 so £10.50 would be a bit above the midpoint of the consultation range
- All above figures exclude VAT so to calculate retail break-even point (excluding all other costs) add 17.5%
http://business.timesonline.co.uk/tol/business/industry_sectors/media/article7069785.ece
1) Sky will be allowed to sell Pay TV channels on DTT ("Picnic")
2) Wholesale price for Sky Sports 1 will be "close to £10.50 .... about a 20% cut"
NB:
- Current wholesale price of Sky Sports 1 (paid by VM) is £13.48 so a 20% cut would be £10.78
- OFCOM was consulting on a range between £9.41 and £11.24 so £10.50 would be a bit above the midpoint of the consultation range
- All above figures exclude VAT so to calculate retail break-even point (excluding all other costs) add 17.5%
http://business.timesonline.co.uk/tol/business/industry_sectors/media/article7069785.ece
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Comments
It's going to be like what happened with Sky Italia in Italy where the EU demanded that Sky Italia give up its terrestrial operations because they had pay TV platforms on both satellite and terrestrial.
I'm sure Virgin/BT etc will all complain if this is true but it's their own doing to be honest.
Yes, if the report is correct I would agree with that.
The wholesale price consultation ranges were quite wide so the exact amounts set by OFCOM will be key. A price of below £10 for Sky Sports 1 would have been a pretty big blow for Sky - not only in lost revenue from VM re existing customers but because it would have given at least some potential for price cutting by VM and the likes of BT.
But if the wholesale price is over £10.50 and possibly up around approx £10.80 then really Sky has nothing to fear from VM or BT.
eg there have been various media reports of BT charging £15 for Sky Sports 1 - ie £12.77 excluding VAT. So with a wholesale price of between £10.50 and £10.80 that would give BT a gross profit of approx £2 per month out of which they would have to fund all other costs - ie subsidised boxes, installation, transmission, marketing, admin etc. That would mean a bottom line loss for certain.
Your argument seems to be "it doesn't matter if other offerings are crap, that should be what we're restricted to because Sky are bad".
But if this report is correct I wonder if they would be able to launch Picnic whilst at the same time appealing the wholesale prices? So Picnic would actually launch before regulated wholesale prices were introduced.
If that happens expect a lot of noise!
Believe me, the second BSkyB announce the launch of Picnic on DTT, I will be contacting my MEPs - and just like in Italy, we'll see the EU demanding Sky give up Picnic on DTT.
Leave pay TV to satellite, cable and via phone lines.
Why should they be given space that is meant for FTA/Freeiew TV. They should have to pay and buy for space, there have been chances to buy slots but they never have.
Sky already hold too much of a monopoly on the Pay market as it is.
I wonder what half my colleagues will watch at work now? Most visits to the staff canteen you will find Sky Sports News (and some are so addicted that they will watch even if an event is on another channel).
But does this move open up the calls for a BBC Sports Channel especailly on Freeview? Not saying it should be all live Sport, but as we know the Red Button offers.
-Five Live Sports with on screen graphics (football, cricket)
-Australian, Paris and Wimbledon Tennis
-British Golf Events - Following players over the course, not jumping from hole to hole.
-Sports from multi sports events (Olympics, Commonwealth Games)
-Magners League
At present they have the sports news on loop, could they have a regular sports desk (subject to live events), half an hour at 8am, Midday, 6pm, 10pm. Then fill time with the loop or reruns of sports, as they do with the six nations, rugby league super league, football league show?
But what this Ofcom move does mean is that the BBC News channel will become more important, as it will be the only free rolling news channel available.
Sky news, CNNI, CNBC, BBC News, Bloomberg, EuroNews, CCTV9, Russia Today, France 24, Al Jazeera, Press TV, NHK World. Are all still free to air and freely available to anyone with freesat.
However it seems reasonable to assume that if Sky News ceased to be free to air on DTT, the same thing would happen on satellite.
I would have thought less would bring in more subscribers so at the end of the day Sky would be receiving the same amount and also have larger advertising rates. At the end of the day the consumer will come out on top as they will be paying less.
Sky News isn't available on the UK Freesat service (Astra 28) but it is available on Astra 19.
I'm not sure if BSkyB would bother taking it off Astra 19 because not many UK homes will have dishes that are able to receive this.
You can tune it in manually in non-Freesat mode.
I wasn't aware of its Freesat status but it is certainly available free-to-air, so 'non-Freesat' free to air boxes like mine can get it, and is it not possible to get it on a Freesat box if you 'tune it in' manually?
I would expect it to become encrypted on Astra 28, but left as it is on Astra 19.
I think BSkyB want it to be part of their Picnic package, so I guess they wouldn't want to be giving it away for free to satellite viewers (even if it's only the tech savvy ones who tune it in manually).
Is that just Sky Sports 1? What about 2, 3 and 4?
I assume Sky would be able to charge more for the HD versions?
I agree.
As long as what sky broadcast is on an "open" platform, that is the same as the one everyone else uses, then as far as I'm concerned they can do what they like with their content.
It's when they tie up their content to a platform, that is specific to them, that they then insist you rent from them, that I have a problem.
It remains to be seen what they will do on DTTV.
tim