Ofcom launches UK retrans review

UK media regulator Ofcom has launched a consultation that could pave the way for broadcasters such as the BBC and ITV to charge satellite pay TV companies to carry their channels.

The scenario could see UK terrestrials receive tens of millions of pounds a year in so-called ’retransmission fees’ from the likes of satcaster Sky and cableco Virgin Media.

ITV has been the most audible in its campaign to receive fees in recent months, calling for a model similar to that of the US.

The US retransmission consent scheme, which was introduced in 1992, means free-to-air (FTA) broadcasters are paid for delivering content to competing platforms. Under the current UK regime, no payment is made by pay TV platforms to the terrestrials, which led to ITV commissioning a report about the situation.

However, Sky has hit back with the firm’s group director of corporate affairs, Graham McWilliam, calling on ITV to provide “concrete deals” in the debate.

In a report published yesterday, the UK Commercial Broadcasters Association (COBA) also expressed concern that retransmission fees would take money away from its members.

But Ofcom said the freedom to charge retransmission fees would help compensate public service broadcasters (PSBs) for their costly obligations such as news provision. The watchdog also stressed that changes might be needed to secure the future of services in an increasingly fragmented television market.

“The entire TV industry must meet new challenges from an evolving media landscape, which brings risks and uncertainties,” said Ofcom’s outgoing chief executive Ed Richards, who was today replaced by Sharon White.

“But our view is that the public service broadcasters are in a strong position to continue contributing to a successful and innovative sector.”

In September, Sajid David, the UK culture secretary, used a keynote speech at a London conference to argue that some of the industry’s TV regulations are severely outdated. The UK government has begun its own review of the retransmission fee debate.

The issue was also a hot topic at the Edinburgh International TV Festival, where Channel 4 chief executive David Abraham demanded payment from Sky for carrying its services. But Sky subsequently hit back, labeling the words as “glaring inconsistency.”

The findings of the Ofcom review will be published next summer.