MediaWorks quiet on Igloo investigation

MediaWorks' Sussan Turner says there is concern about a Sky/TVNZ joint venture. Photo / Supplied

MediaWorks, owner of TV3 and Four, is understood to have made an approach that led to a Commerce Commission investigation of Igloo TV.

Managing director Sussan Turner yesterday issued a statement saying "more people are becoming concerned" about the Sky TV-Television New Zealand joint venture.

She declined to give MediaWorks' view on Igloo and its impact on the television market, or say whether it had lodged a complaint that spurred the investigation.

Telcos that want to develop pay TV ventures have also been active in the debate about new pay TV ventures.

But MediaWorks is the most immediate loser from the 11-channel "Sky-Lite" venture and TVNZ's closer relationship with Sky TV.

Igloo also undermines the free-to-air platform Freeview in which TVNZ and MediaWorks are the biggest players.

Sky TV chief executive John Fellet was confident the Commerce Commission investigation followed a complaint.

"They don't go out looking for problems," Fellet said.

He was confident there would be no issues because the commission was concerned with consumers, not companies, and Igloo provided extra choice.

The investigation relates to Section 47 of the Commerce Act and requirements related to mergers - in this case the creation of the Igloo joint venture, understood to be valued at about $33 million. However, the commission said the investigation would also consider Section 27 of the act, which incorporated competition issues.

Igloo will broadcast on the digital terrestrial platform and will provide 11 pay TV channels as well as access to free channels at a cost of about $25 a month.

The launch is planned for May or June and will allow people to download movies and TV shows from the internet for an additional charge.

Fellet said this week that if there were regulatory issues over Section 47 merger provisions, Sky would go ahead with Igloo without TVNZ.

Industry sources say that TVNZ - with 49 per cent to Sky's 51 per cent - has minimal involvement in Igloo, which is managed by former Sky TV marketing executive Chaz Savage.

A well-placed source said TVNZ had always been aware that Sky would launch another pay TV platform that provided a budget-option pay TV deal for people who would not buy a full Sky package.

The source said the Igloo joint venture was a a good option for TVNZ because it provided a portal into pay TV without challenging Sky's considerable firepower.