No matter where you go in the media, it’s hard to avoid Rupert Murdoch and his children.
UK media reports at the weekend had Rupert Murdoch’s second daughter Elisabeth as an early contender to be CEO of the troubled ITV commercial TV network, a day after the UK’s media regulator, Ofcom, recommended that BSkyB, the Pay TV company dominated by the Murdoch family, should make its premium content available to competitors at wholesale prices.
That brought a hostile reaction from BSkyB, which criticised Ofcom, saying it will take all “available legal avenues” to challenge the decision.
Ofcom started examining the British pay-TV market in early 2007. It is now proposing a “wholesale-must-offer” system which would require BSkyB to offer its premium channels, which include Sky Sports 1 and Sky Movies, on a wholesale basis to retailers such as Virgin Media, whose merger BSkyB blocked by buying a dominating near-18% stake.
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BSkyB owns 17.9% of ITV, which it has been told to sell, but it is resisting this. James Murdoch, who runs BSkyB, bought that stake and BSkyB, has lost the best part of a billion dollars on that anti-competitive lunge (which blocked a merger between ITV and Virgin media). UK and US media laud him for being “clever”.
It is hard to imagine how any one could have imagined that Ms Murdoch would be an acceptable CEO to ITV to competition regulators, which are trying to open up competition by forcing BSkyB (run by brother James) to share its content with competitors, while controlling ITV’s future with a stake he won’t sell, despite regulators telling him to sell.
It’s another clear example of how the Murdoch family places itself above the norms in competition policy: and how they and their media mouthpieces pay lip service to the ideas of competition. BSkyB has taken its case to the Court of Appeal, a measure of the lengths to which the Murdochs will attempt to hang on to an anti-competitive position.
It will be off to court if Ofcom persists with its plan to force BSkyB to slash the prices it charges other companies for its sports and movies channels by up to 30%, meaning customers of its pay-TV rivals could effectively subscribe for less (such as Virgin Media and BT Vision).
A Sky spokesman told the UK media: “We disagree fundamentally with Ofcom’s approach, analysis and conclusions,” adding that the broadcaster would fight the “unwarranted intervention”.
Ofcom said it was concerned that the profits Sky makes in its wholesale business were “likely to be reflected in high prices paid by consumers”.
The Ofcom move was criticised by BSkyB’s partner in the monopoly on soccer, the Premier League.
The failure last week of the Setanta Pay TV channel has increased BSkyB’s dominance of premium league soccer. ESPN (part of Disney) bought the Setanta Premier League rights, but will sell them through BSkyB, which means it now will show most of the Premier League games on its Pay TV platform. It had been only able to bid and show four of the five packages of games, now it will show all five.
Will a weak UK Labour Government avoid a fight with Murdoch by not acting on the Ofcom proposal?