Pay-TV Ruling Leaves Sky Fuming, BT Disappointed, Viewers Somewhat Interested

Just when it seemed like News Corp (NYSE: NWS) could ramp up its paid content odyssey this year, UK media regulator Ofcom has told its majority-owned BSkyB (NYSE: BSY) satcaster to cut the prices it charges rival TV platforms for its premium channels.

Ofcom’s long-running pay-TV inquiry concludes Sky “exploits its market power, so…

— (1) BSkyB must offer Sky Sports 1 and 2 to other platforms for £10.63 each, rather than the current £13.88 (or, when combined, for £17.14, rather than £19.15).

— (2) Sky and Arqiva are allowed to launch their proposed Picnic pay-TV service over Freeview – if Sky implements the above Sports obligation and offers Sky Movies to Freeview TV sellers.

— (3) Ofcom has the same concern over Sky’s first-run Hollywood rights for linear Sky Movies and VOD, but says it must refer the matter to a Competition Commission inquiry rather than rule itself.

But the conclusions have left an aftertaste of “nobody wins”

— Having effectively created the UK pay-TV market, Sky is hopping mad, planning to appeal in court: “Ofcom