Media regulatory body Ofcom have this week offered a potentially crucial precedent in the broadcasting industry of the UK, after declaring that satellite broadcasters Sky, due to their Sky Sports range of channels, are well within their rights to refuse to carry advertising for soon-to-be competitors BT Sport.
The decision follows complaints by BT that their fair attempts to try and put commercials on Sky-branded channels were being denied, but it appears as though Ofcom are not in their corner, albeit leaving a ruling that any broadcaster (BT included) should now feasibly be able to take advantage of.
Speaking of a broadcaster’s right to ’discriminate against their competitors’ in such a way in order to ’protect its commercial interests & brand identity’, Ofcom summarise: “We accept that a broadcaster may in principle have legitimate commercial reasons to refuse advertising from a direct competitor on its own service.”
The organisation also claimed that the preservation of Sky’s rights will not have a major impediment on BT’s attempts to target customers in the ‘ABC1 men’ demographic, calling the impact from not advertising on Sky ‘limited’ at best.
The news will come as a relief to Sky as they face increasing pressure from their new rivals (who’s efforts have forced the satellite broadcaster into action by bundling Sky Sports with broadband), with the company’s ‘group director of corporate affairs’ Graham McWilliam having said of the initial complaints from BT: “BT’s demands are a bit like Tesco expecting to advertise inside Sainsbury’s.”
However, Ofcom are not yet done with adjudicating between the two, after BT recently offered a complained that Sky are ‘refusing’ to offer their Sky Sports 1 & 2 channels ‘on fair terms’ to the ‘BT-branded’ YouView service (but are seen on other YouView boxes such as those provided by TalkTalk), claiming that the larger service are not permitting broadcast on BT set-top boxes unless BT ‘offers Sky’ their BT Sport channels.
BT are of the opinion that Sky’s playing hardball is one which is an ‘abuse of a dominant position’, one that they should not do with their ‘obligations’ as the market leader, attempting to force a newcomer such as themselves to do something they are not ready for. The telecommunications company noted: “We are pleased Ofcom has decided to open an investigation as we believe Sky has behaved in an unreasonable and discriminatory manner. This is because they have refused to provide Sky Sports 1 and 2 to BT on YouView on fair terms whilst providing them to other pay TV retailers such as TalkTalk.”
While Sky have denied the accusations, it is clear that this debate (and likely many more to come) will not go away quickly, but will BT’s standing ground be worthwhile by claiming a sizeable market share over the next few years?