BSkyB criticises Ofcom’s “flawed” pay-TV review

Pay-TV operator BSkyB will today deliver a detailed response to communication regulator Ofcom’s findings that it should wholesale its most valuable content including movies and Premiere League football coverage to its rivals at prices set by the regulator.

According to the Financial Times, Sky is expected to criticise Ofcom for delivering a financial analysis of the pay-TV market that it claims is fundamentally flawed. Sky will point out, for example, that Ofcom’s model of profitability included an assumption that the operator would add 736,000 customers in 2008 when it actually added 462,000 and that it also assumed advertising revenues would rise at the rate of inflation, despite the current beleaguered state of the ad market.

Sky currently wholesales premium content solely to Virgin Media at a price that the cable operator claims is impossible to make a reasonable profit from. Virgin Media, along with Top-Up TV and BT Vision, filed the complaint that led to Ofcom’s pay-TV review.