European regulators have approved a movies-on-demand joint venture that could offer a competitive advantage to UK cable operators while improving the bargaining position of Hollywood studios with respect to Sky and its movie channels.

The European Commission has approved the MovieCo initiative, a joint venture between Sony’s Columbia Pictures and The Walt Disney Company in conjunction with UK company ON Demand Group, which aims to offer a video-on-demand service in the United Kingdom and Ireland.

The Commission examined the competitive impact of the initiative and concluded that the joint venture will give the UK cable network operators an alternative to procure video content other than BSkyB, which is currently the dominant player on this market.

ON Demand Group describes itself as a leader in managing transactional television content, including the launch and operation of pay-per-view and video-on-demand services.