Telecom New Zealand and Sky sign agreement

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#489086 4-Jul-2011 11:04

The monopolist then makes it impossible for new entries to the market and the result is less choice for consumers.

On this basis, Sky does not have a monopoly

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old3eyes

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#489128 4-Jul-2011 12:44

tdgeek:
The monopolist then makes it impossible for new entries to the market and the result is less choice for consumers.

On this basis, Sky does not have a monopoly

How do you come to that conclusion??

Regards,

Old3eyes

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#489129 4-Jul-2011 12:45

tdgeekMaybe the govt can pass a law to take over Sky then make it FTA

.

So, what you're saying is that you're quite happy to pay for the content as long as everyone pays for it? Where does a persons freedom of choice lay there?

Unless you have some other magic place that taxpayer money comes from - other than planting a beanstalk.

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#489143 4-Jul-2011 13:08

Byrned:
tdgeekMaybe the govt can pass a law to take over Sky then make it FTA

.

So, what you're saying is that you're quite happy to pay for the content as long as everyone pays for it? Where does a persons freedom of choice lay there?

Unless you have some other magic place that taxpayer money comes from - other than planting a beanstalk.

All content is bid for, there is no Sky lockout that I am aware of. I recall Sky paid $2.3 million for the netball, TVNZ offered $700,000, so Sky got the content. Thats not a monopoly situation TV NZ should have bid more.

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#489149 4-Jul-2011 13:14

Byrned:
tdgeekMaybe the govt can pass a law to take over Sky then make it FTA

.

So, what you're saying is that you're quite happy to pay for the content as long as everyone pays for it? Where does a persons freedom of choice lay there?

Unless you have some other magic place that taxpayer money comes from - other than planting a beanstalk.

I agree fully. My post was a while back and was in response to someone complaining about Sky, my response was tongue in cheek. A lot of people seem to want everything for nothing, or they want everything to fit into their needs. If for example my "suggestion" happened, then everyoen would be happy as Sky would then be free. But, as you imply, someone has to pay.

My argument is that Sky pays for content and bills the users, what is wrong with that? Other providers can buy the same content, and at times they do. Wimbledon is a good recent example.

Dulouz

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#489152 4-Jul-2011 13:17

tdgeek:
Byrned:
tdgeekMaybe the govt can pass a law to take over Sky then make it FTA

.

So, what you're saying is that you're quite happy to pay for the content as long as everyone pays for it? Where does a persons freedom of choice lay there?

Unless you have some other magic place that taxpayer money comes from - other than planting a beanstalk.

All content is bid for, there is no Sky lockout that I am aware of. I recall Sky paid $2.3 million for the netball, TVNZ offered $700,000, so Sky got the content. Thats not a monopoly situation TV NZ should have bid more.

Sky's monopoly postion enables them to dominate the market by being able to bid more - consequently pricing competitors out of the market.

Amanon

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#489157 4-Jul-2011 13:28

How did they get Wimbledon then?

Clearly Pay TV has a better business model than FTA, there is nothing to stop TVNZ having a pay TV component. Remember, some things cost more, someone has to pay

jonherries

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#489193 4-Jul-2011 14:44

I want a better pay per view option in all of this. I refuse to spend money on Sky's entire line up, but would like to buy selected movies, sports etc.

I guess this will eventually come via the intertubes but it annoys me as I want it now.

Also according to Merriam Webster dictionary (.com version) the definition of a monopoly is:

1: exclusive ownership through legal privilege, command of supply, or concerted action

2: exclusive possession or control

3: a commodity controlled by one party

4: one that has a monopoly

Bit different to the tests the ComCom applies, but in general if you have a competitive advantage you have a monopoly. Often we grant monopolies on purpose to encourage investment: patents, copyright, auctions of public goods (eg. emf spectrum), information assymetry (eg. healthcare), agency theory etc.

The problem we run into is that a monopoly can charge monopoly rents. This occurs when a lack of competition means that we do not pay an efficient price for a good or service.

This creates waste in the system that could otherwise be put to productive good (there are less common issues here but they happen much more rarely and include refusal to provide servce - TSO is a good example of legislation to prevent this).

Therefore it is in the public (general sense of the word) interest that we get the most production from a given dollar. I think there are a few tests in order to justify legislative entry into a market:

Size of company share in the market (definitions are the big gotcha here)
Ability to purchase similar goods (substitutes)
Barrier to entry of competitors
Likely cost of the monopoly to the public

Sky TV creates a barrier to entry based on exclusive content agreements, installed base of satellite receivers and satellite capacity, so could probably be classed as a monopoly.

However I guess we would only see the ComCom regulate SKY TV if they were the only pay tv provider in NZ and bought all the content exclusively and then used predatory pricing to bankrupt any competitors, otherwise it is unlikely due to the significant costs of regulation.

old3eyes

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#489306 4-Jul-2011 18:46

tdgeek: How did they get Wimbledon then?

Clearly Pay TV has a better business model than FTA, there is nothing to stop TVNZ having a pay TV component. Remember, some things cost more, someone has to pay

Most likely because it was in the middle of the nite and unlike rugby not many people would watch it live at that time..

Regards,

Old3eyes

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#489313 4-Jul-2011 19:00

Disagree fully. The only means that you can establish control is if Sky owned all of the transmission capability by satellite. They dont but if they owned enough to effectively limit any others then that is an issue of control. Other than that I see nohing that smacks of monopolistic control. Although exclusive content is mentioned, well that applies to many content types. If Sky or TVNZ or anyone else secured say F1 for 3 years then that is exclusive control, but that is standard. Thats a supply contract, then it expires.

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#493769 15-Jul-2011 16:05

When can we expect some more details on this deal?

compost

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#496387 21-Jul-2011 19:44

tdgeek: Disagree fully. The only means that you can establish control is if Sky owned all of the transmission capability by satellite. They dont but if they owned enough to effectively limit any others then that is an issue of control. Other than that I see nohing that smacks of monopolistic control. Although exclusive content is mentioned, well that applies to many content types. If Sky or TVNZ or anyone else secured say F1 for 3 years then that is exclusive control, but that is standard. Thats a supply contract, then it expires.

I'm sure I've said this already, but:

"Cornering the market" is an anticompetitive practice that is subject to regulatory intervention. The test for anticompetitive practice is undue ability to influence pricing in a market. When two corporates wish to merge, their combined market share may be nowhere near 100% but they can still be blocked because of the potential negative market impact.

To analogise, if you own more than 50% of the property in a township then it doesn't matter if you came by these properties fairly in openly contested sales - the net effect is that you are in a position to massively influence both property and rental prices.

In the township of live/delayed professional sports coverage, there are only a handful of properties that aren't owned exclusively by Sky, so they effectively control pricing of this content. This kind of situation is one that many countries have sought to address.

A time-poor geek is hardly a geek at all

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#496393 21-Jul-2011 19:52

Nicely put compost!

tdgeek

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#496425 21-Jul-2011 21:19

---In the township of live/delayed professional sports coverage, there are only a handful of properties that aren't owned exclusively by Sky, so they effectively control pricing of this content. This kind of situation is one that many countries have sought to address.---

Ok, then the Freeview/TVNZ company needs to outbid Sky to obtain more properties. They can do that, and have done so in the past. Sky does not have content locked down. It bought the rights, as TVNZ can do. Yes, good content has moved to Sky. Why? TVNZ chose not to pay the required price as it will then have a profit problem. It cannot ask too much for advertising, and it has chosen to be a free to air provider, so by its own choice it has limited its capability to offer content, as it chooses to forego a revenue stream. It could have paid the price for content, recovered some by way of premium advertising, and made the balance up by making its premium content pay per view.

That woud be a sound business model to compete with Sky. What if Sky chose not to get some top content? Do you think free to air TV can buy it and show it for free?

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#498312 27-Jul-2011 00:56

mattRSK: When can we expect some more details on this deal?

+1

I searched for 'sky' on Telecom's website, and I'm almost certain the last time I looked (last week maybe?) that this page wasn't there. It looks to me like it was created yesterday, am I reading that wrong? If it is new, is it a sign that some more info will be forthcoming shortly?

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