As Sky get more and more involved in the world of programme making (they are currently developing their own network of three music channels) the Murdoch owned company could find itself increasingly under pressure from government where some are increasingly concerned that Sky is building itself a dangerous monopoly being a programme maker, a channel owner and the main satellite TV distributor.
Barry Cox, an influential adviser on media policy to the government and one of Tony Blair's closest allies, last night said regulators should examine whether to require the satellite firm to separate its business as a platform operator (ie the company that rents you your satellite dish and set top box) from its business as a provider of channels (ie the company that runs Sky One and Sky Sports).
Speaking at Oxford University Cox argued a break-up of Sky would prevent its platform operator division giving preferential treatment to its own channels or to show bias against rivals. ITV Digital claimed the rates it had to pay Sky to broadcast their channels was one of the things that crippled their terrestrial digital platform (which was in competition with Sky’s satellite platform). Meanwhile we are expecting some tough negotiations to take place later this year when Sky’s contract with MTV comes up for renewal – Sky are expected to try and half the fees they pay Viacom to broadcast MTV on the grounds they are launching their own music channels and will be less dependent on the MTV network.
Cox said: "Sky has undoubtedly been better organised and better managed than its rivals, but it has also been extremely ruthless in its behaviour. BSkyB is now profitable - it no longer needs the economic prop of forcing viewers into the basic and premium packages it has operated for more than 10 years.”
Last year the office of fair trading decided there were insufficient grounds to conclude Sky had broken any laws. Cox now wants the new media regulator Ofcom to introduce tighter regulations to protect the TV channels who compete with Sky, but at the same time rely on Sky to reach the public.