ITV chief calls for Sky and Virgin to pay for content

Adam Crozier: the ITV chief executive calls for Sky and Virgin to pay for content
Adam Crozier: the ITV chief executive calls for Sky and Virgin to pay for content

ITV's chief executive Adam Crozier is calling on major pay-TV platforms BSkyB and Virgin Media to pay for content from UK public service broadcasters BBC, ITV, Channel 4 and Channel 5.

Crozier’s call follows the Government saying it wanted the fees PSBs paid to be on the pay-TV platforms scrapped last year.

The leader of ITV has now ratcheted up the pressure further, calling even the free transmission of the channels on the platforms effectively a multi-million pound subsidy to Sky and Virgin Media.

The demand for action follows the publication of a report that shows how retransmission payments to broadcasters in the US have contributed significantly to the new "golden age of television" in North America.

In the US the "retransmission consent scheme", which was introduced in 1992, means free-to-air broadcasters are paid for delivering content to competing platforms.

The research, carried out by NERA Economic Consulting, concludes that introducing payments to broadcasters for retransmitting their content has "contributed significantly to the overall health of the US broadcasting industry".

In 2013, US free-to-air broadcasters received around $ 3.3billion in retransmission payments.  The report reveals that these fees account for less than 3 per cent of cable operators’ revenues, and have little or no impact on Pay-TV prices.

UK Public Service Broadcasters invest around £3 billion on programming – of which ITV alone invests almost £1 billion a year; the vast majority of which is invested in original UK content.

In the case of the commercial PSBs, this is not only a driver for UK economic growth, the content is provided free to viewers throughout the UK at no direct cost to the taxpayer. Under the current regime, no payment is made by the Pay-TV platforms to PSBs who fund this programming.

Adam Crozier, chief executive at ITV, said: "Introducing retransmission fees would have clear benefits to the UK creative industries and the wider economy – as well as to viewers right across the UK – by enabling PSBs to continue to invest in the original programming people love to watch.

"The majority of viewing on these Pay-TV platforms is PSB programming yet ITV, whether as producer or broadcaster investing in creating that content, doesn’t receive any payment – despite the fact that Pay-TV platforms pay commercial terms for other channels.

Crozier added: "The impact of this wholly outdated regime is that UK Public Service Broadcasters are forced to subsidise major Pay-TV platforms.

"In today’s highly competitive media marketplace that is simply wrong – and to the detriment not just of the PSBs, but the consumer and the wider UK creative economy.

"It is in the interests of all broadcasters that we encourage the regulator and government to look again at this issue for the benefit of the industry and viewers."

Graham McWilliam, group director of corporate affairs at Sky, has been the first to warn against Crozier's request, suggesting it will fundamentally change the marketplace and negatively impact the consumer.

He said: "ITV wants to keep the very significant benefits of its PSB status while cherry-picking from the fundamentally different US market.

"UK satellite viewers don't pay to receive free-to-view PSB channels and Sky doesn't pay for content that is given away for free on other platforms. If additional charges were introduced, the reality is that millions of households would end up paying for PSB channels that are supposed to be free."

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