Thursday, 28 March 2013

Netflix, football rights and the future of media competition

Phil Evans, Coordinator of the International Network of Consumer Antitrust Advisers, reports from Day 2 of the 2013 OECD Global Forum on Competition.

Day one of the Global Forum on Competition focused on the relationship between competition policy and poverty.

While there were some standout examples from developing countries of the link and indeed some good presentations about how technology and regulation can help deal with some aspects of poverty, in the end it felt a bit like having watched a big Hollywood Blockbuster: you enjoyed it at the time, but afterwards it felt a bit like you had not really learned a lot and what you had learned had not really been that new.

So, on Day 2, we moved onto a review of two issues. The morning opened with a discussion of competition issues in media markets and a discussion of a review carried out between the OECD and the International Competition Network about competition agency cooperation experiences.

The discussion on media competition issues was quite detailed in terms of agency interventions and outlines, with many covering the same issues. It was enlivened by presentations from Netflix and Canal+, the big French broadcaster.

Their involvement was particularly useful as they currently sit on either side of a major dispute in media analysis. Canal+ as an incumbent broadcaster is being squeezed by Netflix, a company using broadband to deliver streaming content. Canal+ spent a fair bit of time pleading for a level playing field (code for: ‘please restrict Netflix’) while Netflix pleaded to be left alone (code for: ‘let us hog all the bandwidth for free’).

On balance, Netflix made the better case, in part because Canal+ were taking the long-established line of the incumbent under pressure: ‘please extend regulation so the new guy has to have the same costs as we do’; while Netflix could present themselves as the innovative new kid on the block.

Of course, it is more complex than that, but the debate was an interesting snippet of where discussions on media competition are likely to be heading. Interestingly, the presence of Netflix in the UK was used as a significant factor in the Competition Commission's report on the market for Pay-TV. (Caveat: I am a Member of the UK CC, but did not sit on the inquiry.)

One thing confirmed by the discussion on media competition was the global importance of football (the version that actually revolves around kicking a ball with your feet).

Agency after agency talked of the centrality of sports rights to media markets and the gradual downplaying of movie rights as a source of concern. 

Of course, this could simply boil down to the difference between a monopoly supplier of a sport (the league) with an oligopoly in the shape of the movie studios. Either way, football rights cropped up in country after country as a source of concern.

One refreshing view that cropped up throughout the conference was the interventions from Tunisia, who would regularly tie the issues under discussion with the effect of the Arab Spring on the country.

The discussion of a growth of media sources after liberalisation was refreshing to hear and the agency bought a bit of youthful dynamism to the discussions.

The final session focused on the knotty problem of cooperation between agencies. The topic is enormously important to agencies and indeed the companies they are reviewing, but is very much part of the regular dialogue between agencies and has taken on almost semi-religious tones and pleadings.

At root, the issue is the problem for agencies to exercise their legal powers within borders while dealing with requests for information from outside their borders that present huge legal problems to comply with. Despite progress, this issue will keep being a topic of discussion for years to come.

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