LONDON: The arrival of Lovefilm and Netflix in Britain has weakened the grip of BSkyB in the pay-TV movie market, the Competition Commission said on Wednesday, making it less likely that the regulator will intervene in the sector.
The provisional decision reverses an earlier finding by the regulator, which said in August last year that BSkyB's large subscriber base gave it an advantage that meant potential rivals found it difficult to bid successfully for the rights to first-run Hollywood movies.
The Commission had then set out measures to make the market more competitive and break Sky's stranglehold, but it said on Wednesday it had changed its mind after seeing the Amazon-owned Lovefilm and Netflix enter Britain.
BSkyB is also due to launch its own Internet-based service this year which will offer movies without the need for a full BSkyB subscription.
"Competition between providers of movie services on pay TV has changed materially and, as a result of these changes, consumers now have much greater choice," said Laura Carstensen, chairman of the movies on pay TV market investigation.
"Lovefilm and Netflix offer services which are attractive to many consumers and they appear sufficiently well resourced to be in a position to improve the range and quality of their content further."
Given the findings, the regulator said it would now not propose any remedial action. It will review any new responses to its revised provision finding before reaching its final verdict. BSkyB said it would continue to engage with the Commission during the final stage of the investigation.