ITV Renews Call for U.S.-Style Retrans Payments in U.K.

Adam Crozier – P 2013
Getty Images

The home of 'Downton Abbey' cites a report arguing they "contributed significantly" to the new “golden age" of TV

U.K. TV giant ITV on Monday renewed its call for retransmission fee payments from such pay TV giants as BSkyB and Virgin Media.  

"ITV has today called for major pay-TV platforms to pay U.K. public service broadcasters fairly for the transmission of their channels, ending what is effectively a multi-million pound subsidy to Sky and Virgin," the company, home of Downton Abbey, said.
It based its argument on the publication of a new report that it said shows that retransmission fees that U.S. broadcast networks have received "have contributed significantly to the new 'golden age of television' in North America."
The research report, from NERA Economic Consulting, concludes that introducing payments to broadcasters for retransmitting their content has “contributed significantly to the overall health of the U.S. broadcasting industry," ITV said.
The report also highlights that in 2013, U.S. broadcasters received around $3.3 billion in retransmission payments, less than 3 percent of pay TV operators’ revenues.
ITV, led by CEO Adam Crozier who has previously said that retrans fees would become a part of the company's future revenue mix, said U.K. public service broadcasters invest around $4.8 billion (£3 billion) in programming, with ITV alone spending almost $1.6 billion (£1 billion) per year. The vast majority of this is invested in original U.K. content.

"In the case of the commercial PSBs, this is not only a driver for U.K. economic growth, the content is provided free to viewers throughout the U.K. at no direct cost to the taxpayer," ITV highlighted. "Under the current regime, no payment is made by the pay TV platforms to PSBs who fund this programming."
Said Crozier: "Introducing retransmission fees would have clear benefits to the U.K. creative industries and the wider economy, as well as to viewers right across the U.K., by enabling PSBs to continue to invest in the original programming people love to watch."
Calling the current system "wholly outdate," he added: “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."

Concluded the ITV CEO: “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.”

BSkyB, in which Rupert Murdoch's 21st Century Fox owns a 39 percent stake, in a response said that the U.S. and U.K. markets are different and that regulation in Britain would need to change for retrans payments.

Graham McWilliam, the company's group director of corporate affairs, said: "ITV wants to keep the very significant benefits of its PSB status while cherry-picking from the fundamentally different U.S. market. U.K. satellite viewers don't pay to receive free-to-view PSB channels, and [BSkyB] 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."

Twitter: @georgszalai