Igloo on target to launch next month

UKTV, which airs Dr Who, will be included on Igloo's $25 a month subscription. Photo / Supplied

Television New Zealand is confident a Commerce Commission investigation will not shut it out of its Igloo joint venture with Sky Television.

The commission said a decision on the Igloo investigation is imminent and Igloo says it is on target to launch at the end of next month, with or without TVNZ.

Sky is playing down the role of its partner, raising questions about what TVNZ brings to the table other than limiting criticism about Sky's overwhelming dominance of pay TV.

After complaints, the commission investigated whether the two parties met obligations to notify the commission on Commerce Act Section 47 obligations on mergers.

"A person must not acquire assets of a business or shares if the acquisition would have, or would be likely to have, the effect of substantially lessening competition in a market," the act states.

Channels available for about $25 a month include BBC World News, UKTV, BBC Knowledge, Vibe, Kidzone24, MTV Hits, National Geographic, Animal Planet, Comedy Central, Food TV and TVNZ Heartland. Igloo also allows users to download movies for an extra charge.

The Igloo announcement in December marks a growing alliance between Sky and TVNZ. It gives the state broadcaster a valuable foothold in pay TV, including the advent of internet downloads, without challenging Sky.

For Sky it creates a "Sky Lite" package for people who do not want to make a commitment to a full package, and allows them to be targeted to upgrade to a full service.

If successful, Igloo would likely make it more difficult for a rival pay TV venture to start here. It expects to attract 50,000 subscribers within two years, providing about $10 million of one-off revenue from the set-top box and $15 million in subscriptions.

Critics of the current unregulated market say it would be surprising if the commission restricted the joint venture. But there will be comparisons over how the issue of pay television regulation gels with a study from the Telecommunications Commissioner Ross Patterson into ultra fast broadband.

SKY LITE
* Igloo TV is set to launch at the end of next month - with or without TVNZ.
* Igloo will offer a set-top box for less, with 11 pay and most free-to-air channels for about $25 a month.
* It will allow people to download movies and TV shows from the internet for an additional charge.
* Sky has a 51 per cent share of Igloo and TVNZ has 49 per cent.
* They say it will provide more consumer choice.
* Critics such as new pay TV service Quickflix say it will entrench market dominance.