Sky is due to be investigated, along with multiple other firms, by European regulators, into their exclusive deals with Hollywood regarding films.
Sky is one of the biggest pay-TV distributors in the UK and Europe. They broadcast to all of Great Britain, Ireland, Italy and Germany. They provide a wide range of programmes including: documentaries, kids' shows, sports and movies. Recently a new investigation has been launched by European competition regulators into the exclusive deals with Sky, and several other major pay-TV corporations, have with significant Hollywood studios which primarily or only deal with production and distribution of films.
The commission which has organised the investigation has stated it wishes to explore the restrictions in the said Hollywood agreements, with the major European television companies, which provide the TV firms with absolute exclusivity within their countries.
The full list of television firms being investigated was announced by Joaquín Almunia, the European Commission vice president, and was as follows: Sky, all three major branches; BSkyB, Sky Italia and Sky Deutschland, DTS which operates within Spain, and finally Canal+ which is centred in France. The American companies which are involved in the deals include: Paramount, Sony Pictures, Warner Bros and 21st century Fox. Rupert Murrdoch's company 21st Century Fox happens to own 39.1% of BSkyB, 54.5% of Sky Deutschland, and all of Sky Italia.
Vice President Alumunia is adamant that this probing investigation will be centred on and around the issues which arise through the restrictions, upon the paying subscriber, which are implemented through the deals agreed by these firms.
Issues include the geographical location of consumers, as content can be blocked if pay-TV subscribers move, or travel, to another country within Europe. In the discussions regarding this new inquiry, Alumunia pointed out that the European court of justice has ruled complete territorial exclusivity, regarding all programmes, removes competition within the market and therefore should be avoided if possible.
During 2012 the British branch of Sky, BSkyB, had to defend its monopoly power, within the UK, to ensure its hold over pay-TV film rights within the UK. The firm managed this due to its exclusive deals with the six biggest film studios in Hollywood.
Sky was forced to defend its dominance due to an increased popularity in video-on-demand services, such as Blinkbox and Netflix. This most recent inquiry into Sky’s exclusive deals could potentially cause trouble, for the major British and European firm, if anything untoward is found.
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