Low-cost pay-TV service Igloo will launch in New Zealand

Low-cost pay-TV service Igloo will launch in New Zealand next month after an investigation ruled it did not breach anti-competition rules.

The linear DTT service, a joint venture between News Corp-controlled Sky Television and Television New Zealand (TVNZ), will provide free and paid-for content with subscribers able to view 11 pre-pay channels for 30 days for NZ$25 (US$19.19).

New Zealand’s Commerce Commission has approved the venture, ruling it does not prohibit the growth of the country’s pay-TV market as both parties will still be free to compete for other services such as VoD and internet pay-TV.

Commission chairman Dr Mark Berry said: “Our role in this investigation was not to judge the level of competition in the market but whether the joint venture would change the level of competition,” he said.

“When we looked at two possible future scenarios, one with TVNZ’s involvement in the joint venture and one without, we found the level of competition was essentially unchanged. We also found that a number of other potential competitors may enter the market.”

However, this led the commission to investigate potential difficulties new players face on entering the market, prompting a second inquiry into whether Sky’s content contracts with internet service providers hinder competition.

“While this was not part of this investigation, we are aware of concerns that access to content and Sky’s contracts with ISPs may be hindering competition,” said Dr Berry. “As a result, we have now opened a separate investigation.”

Sky welcomed the Igloo decision, describing it as “a victory for innovation – and common sense,” and CEO John Fellet confirmed the service will be launched next month as planned.

“It’s about making it easier for people to access the things they want to see,” Fellet said. “That is a positive, common-sense development for Kiwi consumers.

“As proved by the entry of [Australian VoD platform] 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.”

Quickflix, dubbed the ‘Australian Netflix,’ debuted in New Zealand recently after Time Warner’s HBO acquired a 15.7% stake in the venture earlier this year. http://www.c21media.net/archives/76138

Speaking about the second inquiry, Fellet said that New Zealand “may be one of the most competitive television markets in the world.”

“When Sky started back in 1990, it faced a range of entry conditions, including the need to secure new content,” he said. “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 how to recover the costs.”