The BBC’s director-general wants carriage fees for public service broadcasters, but do the numbers stack up, asks Julian Clover.
In the UK and the United States it has always been the norm that channels appear on a TV platform in return for a carriage fee. Only in continental Europe, where the old analogue channels were often selected by a local regulator, was the position reversed.
As digital platforms and the number of channels on them grew, carriage fees fell, and for the larger broadcasters the way to maintain the fees was to add another channel to the portfolio.
Last Friday in Edinburgh the BBC director-general suggested something akin to a carriage fee increase for the public broadcasters that currently sit on the Sky platform. He based the argument on a $1 per subscriber per month request made by Fox to the US cable giant Time Warner at the turn of the year. The retrans fee was born.
Unlike the Discoverys and CNNs of this world, the broadcast channels do not traditionally receive a fee for their presence. Despite the emergence of DTT, most major European markets only have four or five channels to which the tag ‘broadcast network’ could be applied, and in the case of the UK it’s the five channels with public service obligations, BBC One, BBC Two, ITV1, Channel 4 and Channel 5.
All five channels are a part of the Sky platform, though it should be remembered that ITV1 has previously withheld both itself and ITV1 HD from Sky, while Channel 4 and Channel 5 have struck exclusive deals for their multichannel services.
To confuse the picture, Sky has something called the ‘Platform Contribution Cost’, this in addition to the charges for listings in the EPG that include extra charges for regional variations.
Sky conveniently makes these charges public, and the most recent version shows a hefty £8,293,965 in platform contribution charges paid by the BBC, the fees based largely on the number of viewers reached through the platform.
BBC One alone pays some £4,319,830 per year, against ITV1’s £3,747,925. Cartoon Network pays £207,225. This on top of the fees for the transponder capacity to put them on the platform in the first place.
In his speech Thompson makes clear that the BBC is not asking for any refunds, as a ‘pure’ public broadcaster it has to be available on all platforms.
There is no must-carry rule for UK platforms as such, though if necessary a platform could be ordered to carry a particular channel. In the past when ITV1 was withheld from Sky it could still be received in analogue, but would the same happen today?
Commercial channels in other European markets, for example the TV3 channels in the Nordic region, have ensured they are a part of a subscription package where possible. Advertising revenue isn’t what it used to be, so they need the cushion. So in these markets the PSBs become the only universal service.
UK PSBs have been looking to reduce their public service commitments. In doing so reducing the chances of the retrans fee becoming common currency if they become pure commercial channels.
Indeed ITV, Channel 4 and Five have all signed some sort of agreement with Sky for their non-core channels. Maybe the DG should be looking for reimbursement himself after all.
