Online video market ‘large and evolving’: Sky

Content kingpins Sky have predicted the 'imminent entry' of international content providers to the New Zealand market, in a written response to the Commerce Commission's draft report on demand for high-speed broadband.

The company describes the online video content market as 'large and evolving', and says overseas examples suggest that barriers to entering the market are low.

"As well as current market players, including the recent arrival Quickflix in March of this year, Sky anticipates the imminent entry of other major international players into the New Zealand market," the company's submission reads.

"This is similar to developments that have occurred in other countries.

The Commerce Commission recently cleared Sky's joint venture with TVNZ, known as Igloo, but immediately launched an investigation into Sky's contracts with Internet Service Providers, and how they affect the availability of content.

One ISP, TelstraClear, disagreed with Sky in its own submission to the Commerce Commission, saying there are barriers to effective competition in the supply of video content.

"TCL [TelstraClear] sees little prospect of increased competition in the supply of any form of video content services until the barriers to competition discussed above are removed," the TelstaClear submission says.

Specifically, live sports is a vital component of any content offering, but Sky is the sole NZ supplier.

"TCL needs to be able to source content freely (including unique third party content) and bundle it in unique ways. It needs to be able to approach third parties and to offer them maximum inducement to enter deals that will allow TCL to expand its content offering. Currently we cannot do these things.

A total of nine submissions on the report, including those from Sky and TelstraClear as well as Telecom, Vodafone and MediaWorks, have been published on the Commerce Commission website.