Sky puts Picnic on ice as Ofcom pay-TV regulatory review stalls

by Ben Bold, Media Week 16-Sep-08

BSkyB has shelved plans for its pay-TV service Picnic, which could lead to redundancies affecting up to 28 jobs, including that of managing director Jeff Hughes.

The broadcaster said it has been forced into reviewing the project
because media regulator Ofcom has not yet completed its regulatory
review of pay-TV, and it has launched a period of consultation with the

venture's 28 employees.

However, a Sky spokesman said the firm is looking to redeploy as many
staff as possible elsewhere in the company.

Picnic's suspension has also brought a halt to Sky's search for
potential marketing and media agencies to handle the brand's consumer
launch.

Sky insists that plans to eventually launch Picnic, which would enable
viewers with non-Sky Digital set-top boxes to pay for premium content,
have not been dropped permanently.

The company expressed frustration at the fact that Ofcom has spent 18
months looking at its Picnic proposals and that there still appears to
be "no end in sight".

In a statement, the Sky spokesman said: "While regulation works at its
own pace, no business can go on like this indefinitely, so we've had to
take some pragmatic decisions.

"We will decide whether to reactivate the project when we have
regulatory clarity."

The service was expected to launch next year following authorisation by
the regulator. However, Ofcom is combining its inquiry into Picnic with
an investigation of the pay-TV market and an outcome on both probes may
not now be delivered until next year.

Ofcom responded that BSkyB had itself been late with its submissions and
approach to the inquiry.

The Picnic service would have replaced Sky Three, Sky News and Sky
Sports News on Freeview with Sky Sports 1, Sky Movies and Sky One.