The Commerce Commission says it won't be scrutinising content deals between Sky TV and TVNZ for their Igloo TV joint venture which launched yesterday.
But it might have a look if Igloo introduces new content, a spokeswoman for the competition regulator said yesterday.
Igloo's 11 premium channels - including TVNZ's Heartland and Kidzone24 currently on the basic Sky package - were not new, said a commission spokeswoman.
So the joint venture was not included in its current investigation of Sky contracts with content providers and internet service providers. As well as 11 pay channels for $24.99, Igloo offers access to pay-per-view streamed movies and TV shows costing $5 to $7 a movie through selected internet service providers.
Igloo general manager Chaz Savage said the Igloo library of streamed movies was currently 1000. The number of titles was a balance between having the main new releases while not having too many underused titles. Igloo set top boxes are being sold for $199, online by Igloo and with selected retailers.
The launch had been delayed three times in August, September and November as it resolved technical problems with new technology in its set top box.
It is understood the delays had caused disagreement between representatives of Sky - which wanted to launch on schedule and fix problems as they arose - and TVNZ, which suffered a $14.8 million write-off in its last foray into pay TV - TiVo.
Igloo has been dubbed Sky-Lite because it allows Sky to pick up pay TV customers who would not otherwise pay the $40-plus for a full Sky service. But with SkyTV owning 51 per cent, some are sceptical about its independence. Would Sky allow it to be too successful if it undermined its main service.
The $25 million venture allows state-owned TVNZ to compete in the pay TV market without challenging Sky and its dominance of the market, while state transmission company Kordia also picks up business.
TV3 MediaWorks has questioned whether the joint venture entrenches Sky's dominance.
But in a Commerce Commission investigation of the Igloo joint venture - published in May - the commission found the joint venture was unlikely to lessen competition. Igloo's 11 pay-TV channels are BBC News, BBC Knowledge, UKTV, National Geographic, Animal Planet, Heartland, Vibe, Food Television, Kidzone24, MTV Hits and Comedy Central.
Rival Quickflix lays off staff, cuts costs
Igloo launches as pay-per-view rival Quickflix faces structural upheavals and cost cutting to halt losses.
The Australian-based movie streaming service launched here on March 29, and was the first real competitor to Sky TV's service. It had the jump on Igloo, but has been criticised for its library of TV shows.
Executive chairman Stephen Langsford - who took over the day-to-day running of the firm after the departure last month of CEO Chris Taylor - says Quickflix expanded very quickly. But the move to New Zealand was not a mistake and the company was committed to operating here, he said.
"We have been working on a significant opportunity in New Zealand which we should be in a position to announce shortly."
The share price for the ASX-listed company has tumbled to A2c. The company has laid off one-third of its 100 staff, most of them across the Tasman and cut back on advertising. Langsford - who owns 10 per cent of the stock - insisted Quickflix was in a good position to cut costs while facing new competition from Igloo New Zealand.
The largest investor is the US TV studio HBO, and with its representative Henry McGee resigning from the board with two others there has been speculation it would withdraw its $10 million investment. Langsford told the ASX yesterday that HBO had given its "full support" over the weekend.