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Download (2754Kb) A Thesis Submitted for the Degree of PhD at the University of Warwick Permanent WRAP URL: http://wrap.warwick.ac.uk/105145 Copyright and reuse: This thesis is made available online and is protected by original copyright. Please scroll down to view the document itself. Please refer to the repository record for this item for information to help you to cite it. Our policy information is available from the repository home page. For more information, please contact the WRAP Team at: [email protected] warwick.ac.uk/lib-publications A Comparative Perspective on Competition Law and Regulation of Premium Pay-TV in the UK and Australia Sara-Louise Warner A thesis submitted in partial fulfilment of the requirements for the degree of Doctor of Philosophy in Law University of Warwick, School of Law September 2017 CONTENTS CONTENTS……………………..…….………………...………………………………………….………………......i ACKNOWLEDGEMENTS………………………………….……….…………......................................vi DECLARATION…………………………………………………………….………….…..........................….vii ABSTRACT……………………………………………………….……………………….……………………….….viii CHAPTER 1 ............................................................................................................ 1 INTRODUCTION TO THE THESIS ............................................................................. 1 1.1 Thesis Aim and Objectives .................................................................................. 1 1.2 Context of the Research ...................................................................................... 3 1.2.1 Changing nature of pay-TV in the digital age of convergence ......................... 3 1.2.1.1 Internet television and the growth of online streaming ...................................... 5 1.2.1.2 Viewing paradigm of “any time, anywhere, any device” ..................................... 5 1.2.1.3 Emergence of social media as a broadcasting platform ....................................... 6 1.2.1.4 Meaning of pay-TV in the digital era ..................................................................... 7 1.2.2 Re-definition of premium content in the digital era ........................................ 8 1.2.2.1 Boundary between premium sport content and sports news ............................. 9 1.2.2.2 Basis on which content is defined as premium ................................................... 10 1.2.2.3 Re-defining premium content to include original, high quality drama .............. 12 1.3 Significance of Focusing on the Specific Economics of Premium Pay-TV ............ 13 1.3.1 Effective competition and the goals of competition law and policy ............. 14 1.3.1.1 Role of consumer welfare in competition policy ................................................ 15 1.3.1.2 Relationship between the consumer interest and the citizen interest .............. 16 1.3.1.3 Focus in adopting the consumer welfare standard ............................................ 18 1.3.2 Network industry aspect of pay-TV ................................................................ 19 1.3.3 Multi-sided platform characteristics of pay-TV providers ............................. 20 1.4 Timeliness of the Thesis .................................................................................... 22 1.4.1 Growth of online streaming and the rise of premium drama ....................... 23 1.4.1.1 Global phenomenon around premium drama .................................................... 24 1.4.1.2 Media globalisation and the issue of localness of content ................................. 25 1.4.2 Investigations into sport and movies on pay-TV in the UK and EU ............... 26 1.4.3 Proposed reform of media ownership rules in Australia ............................... 28 1.4.4 Recent and proposed reform of Australian competition law ........................ 29 1.5 Research Methodology ..................................................................................... 31 1.5.1 Comparative analysis of regulatory frameworks in the UK and Australia .... 32 1.5.1.1 Relevance of EU law and policy in the UK in the light of Brexit ......................... 33 1.5.1.2 Legal frameworks that are the subject of the comparative analysis ................. 33 1.5.2 Rationale for the choice of comparators ........................................................ 38 1.5.2.1 Similarities between broadcasting and regulatory regimes ............................... 39 1.5.2.2 Geographic and economic differences between the UK and Australia .............. 40 1.5.2.3 Different institutional arrangements for communications regulation .............. 41 1.5.2.4 Relevance of the US as a point of reference in the comparative analysis ......... 42 1.5.3 Purpose of the comparative analysis ............................................................. 43 i CHAPTER 2 .......................................................................................................... 45 ECONOMIC CHARACTERISTICS OF PREMIUM CONTENT AS A DRIVER OF PAY-TV . 45 2.1 Introduction ..................................................................................................... 45 2.2 Economic Value of the Rights to Broadcast Premium Content ........................... 46 2.2.1 Scarcity of major sporting events and Hollywood blockbusters ................... 46 2.2.2 Symbiotic relationship between sport and television ................................... 49 2.2.2.1 Broadcasting rights as a revenue source for sports bodies ................................ 50 2.2.2.2 Significance of major sporting events to television broadcasters ...................... 54 2.2.3 Monetising premium drama in the international television drama market . 56 2.3 Specific Issues Raised by the Possible Migration of Sport to Pay-TV .................. 57 2.3.1 Product distinctions between televised sport and ordinary market goods .. 58 2.3.1.1 Re-characterising televised sport from a public good into a club good ............. 59 2.3.1.2 Characterisation of televised sporting events as merit goods ........................... 60 2.3.2 Socio-cultural functions of broadcasting sport on free-to-air television ...... 61 2.4 Role of Premium Content in the Development of Pay-TV .................................. 64 2.4.1 Network externalities in pay-TV ..................................................................... 64 2.4.1.1 Complementary interactions between rights owners and viewers ................... 65 2.4.1.2 Non-complementary interactions between viewers and advertisers ................ 66 2.4.2 “Chicken and egg” problem in securing the rights to premium content ....... 69 2.5 Conclusions ...................................................................................................... 70 CHAPTER 3 .......................................................................................................... 72 PREMIUM CONTENT AND PAY-TV DEVELOPMENTS IN THE UK AND AUSTRALIA .. 72 3.1 Introduction ..................................................................................................... 72 3.2 Impact of Pay-TV on the Broadcasting Landscapes in the UK and Australia ....... 73 3.2.1 Role of pay-TV on the development of broadcasting in the UK .................... 73 3.2.1.1 Introduction of pay-TV in the UK and the growth of Sky ................................... 75 3.2.1.2 Delayed entry of BT into the UK cable television market ................................... 76 3.2.1.3 Impact of new entry by online streaming services in the UK ............................. 77 3.2.2 Australian broadcasting with the changing nature of pay-TV ....................... 79 3.2.2.1 Moratorium on the introduction of pay-TV in Australia .................................... 80 3.2.2.2 Introduction of pay-TV in Australia and the rise of Foxtel ................................. 81 3.2.2.3 Cable television in Australia and the National Broadband Network ................. 83 3.2.2.4 Competitive responses to the growth of online streaming in Australia ............ 85 3.3 Market for Premium Sports Rights with the Emergence of Traditional Pay-TV .. 87 3.3.1 Impact of Sky on televised sport in the UK .................................................... 88 3.3.2 Influence of Foxtel on the television coverage of sport in Australia ............. 92 3.4 Competition for Sports Rights from Telecommunications Service Providers ...... 93 3.4.1 Impact of BT’s entry on live sports broadcasting in the UK ........................... 94 3.4.2 Entry of Optus into live sports broadcasting in Australia .............................. 98 3.5 Rise of Premium Drama with the Growth of Online Streaming ........................ 101 3.5.1 Impact of online streaming on the rise of premium drama in the UK ........ 101 3.5.2 Supply of premium drama and online streaming services in Australia ....... 103 3.6 Conclusions .................................................................................................... 106 CHAPTER 4 ........................................................................................................ 109 ASSESSMENT OF THE MARKET AND MARKET POWER IN PREMIUM PAY-TV ...... 109 4.1 Introduction ................................................................................................... 109 4.2 Concept of Relevant Market under UK/EU and Australian Competition Law ... 110 4.3 Product Market Definition in the Premium Pay-TV Context ............................ 112 ii 4.3.1 Standard principles for defining the relevant product market .................... 113 4.3.1.1 Product market definition and
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