Sky accuses BBC of gaining an unfair advantage for commercial arm

BBC
BBC

Sky has warned the BBC is at risk of harming viewers and “distorting the market” for rivals by failing to keep its commercial arm separate.

The pay-TV giant is urging the regulator to take tougher action on the corporation, claiming it was “gaming the system” through “intragroup” deals by allowing BBC Studios and its public ­service arm to remain too close.

Sky, owned by the American cable operator Comcast, pointed to the executives sitting on both its main board and commercial boards as an example of “cross contamination” and raised concerns about the “unfair competitive advantage” handed to BritBox, the subscription, streaming platform co-funded by the BBC and ITV.

It warned the broadcasting watchdog Ofcom that a lack of separation could cause market distortion that would leave the BBC in breach of its Royal Charter.

Sky said: “The lack of separation between BBC Studios and the Public Service, combined with the lack of transparency around how these two entities interact, demonstrate the inadequacy of the current framework and Ofcom’s ability to hold the BBC to account. As a result, the BBC has been able to game the system and enter into intragroup arrangements which risk distorting the market in breach of the BBC’s regulatory obligations, to the ultimate detriment of end consumers.”

The BBC has taken steps to bolster its commercial operations to take pressure off the annual £157.50 licence fee.

Tim Davie
Tim Davie

The broadcaster merged BBC Studios, its production arm, and BBC Worldwide, its distribution arm, four years ago to beef up its commercial operations in response to the threat posed by American streaming services such as Netflix.

The appointment of Tim Davie, the former boss BBC Studios, as the BBC director general in June was a signal that it would step up its commercial ambitions amid political pressure over the future of the licence fee.

Sky struck a deal with BBC Studios two years ago to bring the vast back ­catalogue of the broadcaster’s comedy and drama box sets to its viewers.

An agreement was also sealed earlier this month to give Sky Q customers access to BBC Sounds, the broadcaster’s podcast and radio app. However, Sky told Ofcom it was concerned that the BBC was putting rivals that want to licence its content at a “disadvantage” by making key BBC shows “exclusively available” to BritBox.

A BBC spokesman said: “What the BBC is attempting to do is maximise value to the licence fee payer. That includes growing our commercial income – something we have specifically been challenged to do.”

An Ofcom spokesman said it was reviewing the consultation responses and would publish its findings this year.

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