Stay tuned for a TV drama that could run and run

The Sunday Telegraph - Money & Business - - Business - Christopher Wil­liams

These are un­cer­tain times for Bri­tish broad­cast­ing. Tony Hall, the di­rec­tor-gen­eral of the BBC, last week gave the lat­est in a string of warn­ings about the im­pact of Net­flix and Ama­zon on fi­nanc­ing for home­grown pro­gram­ming. Within a decade the rise of stream­ing ser­vices from US tech gi­ants will mean £500m a year less is spent on Bri­tish pro­grammes. That is more than a fifth of the to­tal.

Chan­nel 4 has ex­pressed its angst over shift­ing view­ing habits in a dif­fer­ent way. Its board has be­come con­cerned that it has lost its edge as the most ex­per­i­men­tal of the pub­lic ser­vice chan­nels. Young view­ers in search of more chal­leng­ing en­ter­tain­ment than the Great Bri­tish

Bake Off are turn­ing away.

Part of Chan­nel 4’s an­swer is to ap­point for­mer

Guardian jour­nal­ist Ian Katz, ed­i­tor of News­night and a com­plete novice in pro­gramme com­mis­sion­ing, to run its £470m bud­get. Eye­brows have been raised in­side and out­side the broad­caster but hey, it is at least a rad­i­cal move.

In some ways ITV’S ma­noeu­vring against Vir­gin Me­dia may be more sur­pris­ing still. As we re­port this week, the FTSE 100 broad­caster is will­ing to cut off mil­lions of homes from its main chan­nel un­less the ca­ble op­er­a­tor pays at least £45m a year in fees. We are all fac­ing higher in­fla­tion but from a base of nil, it rep­re­sents a pretty steep in­crease in the cost of liv­ing for Vir­gin Me­dia. Both sides of the row claim the le­gal and po­lit­i­cal high ground and they can­not both win. Vir­gin Me­dia says it won’t pay any­thing for ITV’S main chan­nel.

The le­gal and reg­u­la­tory sit­u­a­tion is com­pli­cated and untested. That, com­bined with the fact that Vir­gin Me­dia is owned by its own big­gest share­holder, Lib­erty Global, sig­nals that ITV is not just ready to rock the boat in tele­vi­sion, but det­o­nate the cargo of gun­pow­der.

ITV has been dan­gling the prospect of re­trans­mis­sion fees in front of its share­hold­ers for years. The cash would be al­most en­tirely profit and there are good rea­sons to doubt whether any of it would end up on screen. Since 2010 ITV’S spend­ing on UK pro­gram­ming has been held flat at around £750m. Mean­while, its rev­enues and div­i­dend pay­outs have risen sharply.

PAY-TV op­er­a­tors do make money from free ac­cess to pub­lic ser­vice chan­nels, how­ever. It seems a lit­tle un­fair that the Govern­ment’s leg­isla­tive tin­ker­ing has left only Vir­gin Me­dia ex­posed, al­though Sky is a con­cerned observer, but ITV has a le­git­i­mate grum­ble about set-top box recorders. PAY-TV op­er­a­tors have ben­e­fited by sell­ing ser­vices that un­der­mine its ad­ver­tis­ing busi­ness.

What­ever the rights and wrongs, many in the City doubted the se­ri­ous­ness of ITV’S re­trans­mis­sion fees cam­paign and its chances of suc­cess. A change of chief ex­ec­u­tive of­fers the per­fect op­por­tu­nity to aban­don ques­tion­able ini­tia­tives, and yet ITV per­sists. Chair­man and care­taker man­ager Sir Peter Bazal­gette would surely not be go­ing to war with Vir­gin Me­dia with­out Dame Carolyn Mccall’s ap­proval.

A lot of cred­i­bil­ity is on the line. ITV must be­lieve that the re­wards of a vic­tory would out­weigh the hu­mil­i­a­tion of a de­feat. The risks of an­gry view­ers and bad blood with its pay-tv dis­trib­u­tors must also have been part of the cal­cu­la­tion.

On one level, this is a highly en­ter­tain­ing com­mer­cial dis­pute with a highly un­cer­tain out­come. At a greater dis­tance and in the con­text of tech­nol­ogy-driven changes in tele­vi­sion, ITV’S gam­bit makes more sense. Un­til this sum­mer’s Dig­i­tal Econ­omy Act, pub­lic ser­vice broad­cast­ers have had to give their chan­nels away for free. It’s the deal. View­ers get re­gional news.

Broad­cast­ers get cheaper ter­res­trial trans­mis­sion and a guar­an­teed slot on the first page of chan­nel menus. As more view­ing moves to stream­ing those sweet­en­ers will de­cline in value and pub­lic ser­vice obli­ga­tions will be­come more oner­ous. Tra­di­tional chan­nel menus are al­ready be­ing rel­e­gated by pay-tv op­er­a­tors be­hind more on-de­mand op­tions. Dis­count trans­mis­sion isn’t much help if ev­ery­one is watch­ing via the in­ter­net.

For ITV there is a real ques­tion over whether its pub­lic ser­vice li­cence, up for re­newal in 2022, will be worth the hassle by then. Re­trans­mis­sion fees could by then be a sig­nif­i­cant source of in­come that guards against de­clin­ing ad­ver­tis­ing and young peo­ple who aren’t in­ter­ested in

Em­merdale. The fu­ture is at stake.

Stay tuned for an almighty row.

‘Both sides of the row claim the le­gal high ground but they can­not both win’

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.