Access to Content by New Media Platforms: A Review of the Competition Law Problems
George Mason University School of Law; Tilburg University - Tilburg Law and Economics Center (TILEC); Covington & Burling LLP
European Law Review, February 2005
The paper seeks to provide a discussion of the competition law issues raised by access to premium content (essentially blockbusters and football rights) by content delivery operators with a special emphasis on new media platforms. A significant amount of literature has been published on the application of competition rules to premium content rights agreements, but the specific obstacles encountered by new media platforms have been relatively unexplored. This paper seeks to fill this gap in the literature.
The European Commission (hereafter, the Commission) has recognised in its decisions that premium content is an "essential input" for operators active in the delivery of audio-visual content. There is indeed no substitution possible with other less attractive forms of content. In fact, premium content such as major football events represents "stand-alone" driver content for pay-TV operators. Absent access to such content it is very difficult for a content delivery operator to gain or retain market shares. Access to premium content is thus a matter of life or death for such operators.
Yet, getting access to premium content is not an easy matter. First, premium content is scarce as there are only a few blockbusters and a limited number of premium sport events every year. Moreover, premium content rights contracts usually involve some form of exclusivity pursuant to which dominant pay-TV operators often manage to monopolize such rights for several years at the expense of weaker competitors. The combination of scarcity and exclusivity has translated into a spiralling of the costs involved in buying premium content. For instance, while in 1992, broadcasters paid 434 million euros for the TV rights of the English Premier League, in 2000, they paid 2,6 billion euros for only three seasons.
The lack of access to premium content represents a significant handicap for new entrants, such as new media platforms. If these platforms want to gain market share, they need to show programmes, which are able to compete with the content shown by dominant pay-TV operators. Access foreclosure to premium content would thus not only prevent new entries from taking place in the highly concentrated pay-TV market, but would also affect technological developments and consumer choice as the latter would be prevented from watching their favourite programmes on the platform of their choice. Thus, in a number of policy speeches, Commission officials have insisted on the importance that new media platforms gain access to premium content.
The main argument followed throughout the paper is that, while recent Commission decisions contain remedies, which will help new media platforms to gain access to premium content, such remedies are insufficient to create a level playing field in the market for the acquisition of such content. Numerous anti-competitive practices continue to plague this market and further competition law intervention is thus required.
Number of Pages in PDF File: 29
Keywords: Media, Internet, ads, content, TV channels, antitrust, competition, abuse of dominance, collusion
JEL Classification: L12, L13, L41, L51, L82Accepted Paper Series
Date posted: November 12, 2004
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