According to the accepted wisdom British pay-TV broadcaster BSkyB has made its big investments in programme rights (particularly football), technology (HD and 3-D) and marketing (ten million customers) and all that’s left is for it to count the money.
Which is why Rupert Murdoch’s News Corporation is happy (well fairly happy) to spend somewhere north of £8bn on buying the 61 per cent of the company it doesn’t currently own.
But Sky’s riches depend on its ability to sustain premium prices, charging top dollar to football fans who want to see Premiership football (and cricket and rugby fans who want to see England play) and commercial outlets like pubs that cater for the great unwashed who can’t or won’t pay Sky prices at home. Other broadcasters, like Virgin Media, who want to carry rhese programmes also have to pay through the nose.
But Portsmouth pub landlady Karen Murphy has blown (for a while at least) a big hole in that by getting her Sky feed from Greece at about a tenth of the cost that other British pubs pay.
One Juliane Kokoff, advocate general to the European Court of Justice, has ruled in Murphy’s favour in an appeal against an £8,000 fine levied on her in the UK. If the court upholds Kokoff’s opinion then Sky’s football rights will need to be re-negotiated on a pan-European basis (which should be cheaper for customers). Other media owners may find themselves in the same boat.
Rupert Murdoch’s numerous enemies (the number seems to be growing by the day) are rubbing their hands with glee over this.
Sky shareholders are rather less happy. Of course the court may find against Murphy and Kokoff. But for the first time in years there’s a big cloud in the Sky.