Commerce Commission eyes video on-demand

The Commerce Commission plans to keep a closer watch on the video on-demand market, but may not have the power to help determine whether consumers are getting a good deal from Sky Television.

Sky TV is the only major pay-television provider in New Zealand, and sells its service to about half of homes.

The commission began reporting on the international competitiveness of phone, mobile and internet pricing in 2006. But the mandate for that monitoring is set out in the Telecommunications Act, and as such it is not clear whether it could extend to pay television.

A spokeswoman says the commission regularly reviews the scope of its monitoring activity "to capture developments across different markets that impact on competition in telecommunications markets. The commission expects there to be an increasing emphasis in its future monitoring of video services such as video-on-demand, as they become an increasingly important part of the bundles of services delivered to telecommunications consumers."

Freeview chief executive Sam Irvine believes the commission should add pay-TV to its monitoring reports. "It seems unusual that they don't yet have metrics on a pay-TV monopoly. In the interest of the New Zealand viewer, they would be worth knowing."

Sky Television chief executive John Fellet says Sky's prices are competitive when compared with its sister companies and peers overseas. The average income in New Zealand is relatively low, so Sky doesn't have the latitude to raise prices.

Whether Sky is keen on market monitoring by the commission is immaterial, he says. "If they are going to monitor it, they are going to monitor it."

- © Fairfax NZ News