Ofcom keeps door open for UK retransmission fees

Ofcom has left the door open for broadcasters like ITV to potentially charge pay TV operators to carry their channels in the future, in its latest consultation on the future of public service broadcasting (PSB).

The UK broadcast regulator’s paper, published yesterday, said that should challenges to the PSB system emerge in the future, retransmission fees could be one area of regulatory change that could help maintain public service broadcasting.

Other areas for identified for further consideration included relaxing TV advertising rules or considering new tax breaks to encourage investment.

“We note the recent debate around ‘retransmission fees’ and the wider ‘balance of payments’ between the PSBs and TV platforms. This debate raises a number of issues that need to be considered when thinking about options for maintaining or strengthening the PSB system,” said Ofcom.

Looking ahead, Ofcom also said that changes to the ways in which people find and consume content means that the concept of prominence “may need to move beyond simple lists of linear channels.”

“In considering how the concept might be developed it will be important to understand the extent to which discovery tools beyond the linear EPG play a role in people’s consumption habits now, and what role they might play in future,” said Ofcom.

The retransmission discussion comes after UK culture secretary Sajid Javid pledged in September to take a “long hard look” at the retransmission fees to see whether government regulation could be removed from “what should be a private matter between two private companies.”

However, in a research published this week, COBA, The Commercial Broadcasters Association, which represents the likes of Sky, argued that the commercial benefits of ITV’s PSB licence already significantly outweigh the costs, providing ITV with “a net benefit of between £87 million [€110 million] and £221 million per year.”

Ofcom’s ‘Public Service Content in a Connected Society’ review said that British public service broadcasting is “performing well” despite falls in both programming spend and viewing. However, it warned “on-going changes in the sector could present both opportunities and challenges for PSBs.”

“How people watch TV is changing but it is clear that viewers value programmes from the public service broadcasters,” said Ofcom CEO Ed Richards.

“The entire TV industry must meet new challenges from an evolving media landscape, which brings risks and uncertainties. But our view is that the public service broadcasters are in a strong position to continue contributing to a successful and innovative sector.”