BSkyB CEO addresses piracy at MIPTV

Says over-regulation could deter investments in creative fare

CANNES -- BSkyB CEO Jeremy Darroch said Wednesday that a three-pronged attack from piracy, regulation and commoditization threatened "dark shadows" over the value of content, with consequences that would damage producers, studios and consumers alike.

Delivering a robust keynote at MIPTV, the head of Europe's biggest pay-TV platform warned that over-regulation could damage the incentive to invest in creative fare.

The News Corp-backed broadcaster invests around £1.7 billion in sports, movies, U.S. series and original productions each year, with the bulk going on sports rights for Premier League soccer.

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Darroch said that Sky's ability to invest in content investment was under attack from regulators "with an agenda" who wanted Sky to force its wholesale channel pricing down, from illegal downloaders who were engaging in "theft, pure and simple" and from commoditizing content by forcing it to be offered to platforms who did not share in any of the creative risk.

He singled out the U.K. media regulator Ofcom for particular ire, warning that the watchdog's recent ruling on unbundling VOD rights from movie packages would damage Hollywood studios.

"Another section of the industry that is set to be impacted by the intervention [is] the studios, who stand to lose control of how the rights are sold," he said. "Again this is a clear example of the regulator pursuing its own vision of how the market should work, about that of the rights owners who have decades of experience in how best to secure returns from investment in content creation."

His comments follow Ofcom's decision to refer the matter of movie rights sales to the antitrust investigator the Competition Commission earlier this month.

Sky is on track to achieve 10 million subscribers by the end of the year and has pioneered HD and 3D television in the U.K., with plans to launch an in-home 3D TV channel later this spring.

Asked in a Q&A session if Sky's domination of the U.K. pay-television sector and its leadership position in the arena of HD and 3D television made it effectively a monopoly that government would have to break up, Darroch responded; "I disagree entirely."