SKY says IGLOO decision is "a victory for innovation – and common sense"

Wednesday 16 May 2012, 3:01PM
By SKY Television NZ

The Commerce Commission’s decision regarding the IGLOO joint venture between SKY and TVNZ is “a victory for innovation – and common sense”, says SKY.

The Commission decided that the Igloo joint venture was not anti-competitive, and did not breach the Commerce Act.

CEO John Fellet says the decision means IGLOO will launch –  as planned – in June, offering 11 pre-pay channels for just $25 for 30 days viewing, plus pay-per-view options.

Fellet says IGLOO offers consumers more viewing choice and comes with no contracts and no obligations. “It’s about making it easier for people to access the things they want to see. That is a positive, common sense development for Kiwi consumers. SKY is pleased with the decision as it represents a pragmatic and reasonable approach to competition allowing businesses to compete with each other for customers.”

He says the decision shows the Commerce Act regime is not there to give a leg-up to inefficient competitors.

“The Commerce Commission, in dealing with the IGLOO complaints in our opinion made a clear statement – if you want to win customers, do it like all NZ companies have to - by being innovative and bringing real choice to New Zealand consumers.

As proved by the entry of Quickflix to New Zealand just a few weeks ago, a new pay TV provider can enter the market at any time. All they need to do is make an investment in getting content and delivering that content to customers, as SKY did when it started more than 20 years ago. Obviously the options for delivering content to customers are even broader now.”

Fellet says: “We will, of course, work with the Commission on its investigation into our content and ISP agreements. We understand why the Commerce Commission had to investigate the IGLOO venture – because of complaints by competitors of TVNZ and SKY. We also understand why the Commerce Commission wants to review the ISP agreements we have – once again because of complaints from our competitors. When SKY started back in 1990, it faced a range of entry conditions, including the need to secure new content All content is owned by someone and you have to go out and buy it in a competitive market. Once you buy this content you have to figure out to recover the costs. It took SKY 14 years to break even. New Zealand may be one of the most competitive television markets in the world, between Freeview and SKY there are more channels per capita than in any other market, and there is competition from new entrants, especially from overseas such as Quickflix. Competition for content in New Zealand is so intense that the price that content providers receive from NZ broadcasters for shows like Desperate Housewives, CSI, Downton Abbey and for the Rugby is probably the highest per capita in the world as well”.