End of £140m ITV giveaway: You can’t air our hit shows for free any more, it warns rivals Virgin and Sky
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- October 6th, 2017
ITV is demanding more than £140million a year for use of its main channel by pay TV rivals.
Cable-and-satellite broadcasters have been able to carry the channel cost-free for years thanks to laws designed to help the cable-and-satellite TV markets when they were in their infancy.
But in a victory for ITV over the summer, legislation means it can demand cash from operators such as Virgin Media – with an implicit threat it could pull its channels if no agreement is reached.
This week analysts at Liberum put the amount that ITV could extract from the companies at more than £140million.
The fees increase will be a top issue in Carolyn McCall’s in-tray when she takes over as ITV chief executive in January, with the broadcaster seeking to reduce its reliance on falling advertising revenues.
McCall, however, is expected to face a difficult battle, with Virgin Media insisting there is ‘no reason’ it should pay. The negotiations are further complicated because Virgin’s owner, Liberty Global, is ITV’s second biggest shareholder.
- 7,800 Hours of shows produced by ITV Studios last year
- 21.4pc Share of TV audiences held by ITV channels
- 60pc Of TV viewers reached by Coronation St, about 21.6m people
- £1bn ITV will spend making TV shows this year
- 150 Countries showing ITV’s hit drama Victoria
But an ITV spokesman said: ‘ITV should be paid fairly by pay TV platforms that make money from our multi-billion pound investment in original UK content, so we can continue to invest in the programmes that our viewers enjoy.’
Under the laws, Virgin and Sky have also been able to transmit the main channels of the BBC, Channel 4 and Channel 5 because they are considered public service broadcasters. While the other broadcasters have supported its lobbying in the past, ITV has been the most vocal in its calls for change.
Subscription TV providers already pay ITV for its other channels, such as ITV2. They also argue they already compensate the public broadcasters such as ITV and the BBC by giving them top-billing on set-top box TV guides, as well as highly-prized channels such as ‘103’ and ‘101’ respectively.
Ministers, despite changing the law which allowed ITV to make its demands, have said they would not favour broadcasters levying extra costs on TV providers for their main channels.
Tom Mockridge, chief executive of Virgin Media, said earlier this year: ‘The Government has been clear, new fees should not be paid for mainstream channels.
ITV is already fully compensated through its prominent position, audience reach and additional advertising revenue this delivers. It is carried for zero fee by all UK platforms and there is no reason why this shouldn’t continue to be the case at Virgin Media.’
A Government spokesman said yesterday: ‘Having carefully considered the wide range of views which have been expressed on this matter, the Government believes it is for the market to determine what fees, if any, are applicable.’