Sky halves EPG charges for public service broadcasters and saves BBC local radio
Sky is set to lower the charges it makes to the four public service broadcasters after complains that the prices were excessive. The BBC will have 5.5m back, 5.7m will go to ITV, 2.3m to Channel 4 and 600k to Channel 5. This is enough to reduce the proposed cuts to BBC local radio.
"The value Sky gets out of carrying BBC channels is huge, if Sky had to pay for that it would be hundreds of millions of pounds," said Tate. "Licence fee payers are being unfairly disadvantaged, the logic is that Sky should be paying to carry the most popular channels."
It is still worth noting that almost three quarters of viewing of TV channels (by Sky subscribers and non-subscribers) is to free-to-air channels provided by the main public service broadcasters, the BBC, ITV plc, STV, UTV, S4C, Channel 4 and Channel 5.
How does Sky calculate the charges to the BBC?
The current charges to the BBC are made up of:
EPG listing charge: £21,000 per TV channel per year, £16k per radio channel per year. The BBC list 11 TV channels excluding the 20 regional variations of BBC One and Two, and 18 radio channels. That's £231k for the non-regional plus £420k for the regional slots, and £288k for the radio stations, £939k total.
Then there's a 'Platform Contribution Charge' which seems to be set on viewership. For the BBC:
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Michael Friday 9 March 2012 11:20AM
The cuts to Sky's carriage charges apply to all channels, not just PSBs as the headline implies.
And the "non-PSB" slice of the pie chart implies that the other channels are PSBs when of the commercial services only Channels 3, 4, 5 are PSBs. E4, ITV2, 5 USA, and their their sister stations are private commercial ventures.
Michael: I am using the standard industry definition that the BBC, ITV plc, STV, UTV, Channel 4 and Channel 5 (and S4C of course) are the "public service broadcasters", but yes, some of the channels provided by "public service broadcasters" are run on a commercial basis, as they do not have PSB rights/obligations as individual channels.
As it was these PSBs that launched a joint campaign to ask for the price reductions, it is fair to report in that context.
Whether Sky pays or the TV companies pay is dependent on comercial value. Is it more important to the BBC that it is on Sky or is it more important for Sky to have BBC. I don't think to PSBs are forced to go on sky but they have made a commercial decision to pay. At least Sky has reponded to their complaints.
There is of course a president for this. When Sky started ITV refused to go on Sky inorder to promote One Digital. When that went bust ITV clearly felt it was importent to be on Sky.
I mainly have Sky for the sport. If all the PSB channels left Sky I would still subscribe. It does seem to me that it does make financial sense for the commercial channels to stay on Sky.
Mark Agius: The figures appear to be proportional to the channel's share of viewing, as reported by BARB. As BBC One has the highest viewing share, its charges are the greatest.
The fact that the BBC don't want to be subsidising Sky boxes for subscribers, and are not using any subscription facilities, seems to have escaped Sky. The only thing that the BBC require from Sky's services is to provide the 'correct' region from 18 possible regions, for BBC One, and from four nations, for BBC Two. Because Sky have *other* customers with regional requirements (mostly ITV1 microregions, with different advertising), and those customers' region boundaries don't entirely match up, the BBC appear to have to pay for > 50 regions. That is also unfair and should be stopped, but fundamentally I still believe the BBC shouldn't have to pay anything considering that it is a legal requirement for Sky to carry all the BBC's channels.
The BBC are also paying for an additional EPG slot for every variant, in the 971-989 range. They could save money by dropping this (and arguably this is beyond Sky's legal requirement).
The region count could be reduced a bit if the BBC, ITV, C4 and C5 would get together and work out a common set of boundaries. There would still be around 30 regions because ITV1 has that many micro-regions for advertising: the broadcasters with fewer regions shouldn't have to pay for someone else's requirement.
ITV4+1 can't be carried because legacy Sky boxes don't have enough memory - their memory for channel storage is now completely full. Sky would have to break compatibility with those boxes. ITV plc could buy up someone else's slot.
trevorjharris: Sky are legally obliged to carry the PSBs. Communications Act 2003 section 310: Communications Act 2003 . The law failed to set any terms and conditions for carriage, leading to this mess. Sky's requirement to carry does imply that the channels must be there to be carried.
The BBC's Agreement with the government states that they must "do all that is reasonably practicable to ensure that viewers, listeners and other users (as the case may be) are able to access the UK Public Services that are intended for them, or elements of their content, in a range of convenient and cost effective ways which are available or might become available in the future." Satellite and cable are then listed as examples.
You might not watch BBC One, but 84% of the population watched it some time between 20 and 26 February - the highest of any channel, compared to 72.9% watching ITV1, 66.2% Channel 4, 64.0% BBC Two, 55.0% Channel 5, and 21.5% Sky 1. This is precisely why the BBC's share of Sky charges is so high. It does appear that the PSB channels have a discount relative to non-PSBs (including channels from a PSB's stable), otherwise the BBC would be charged many times Sky1's chargeback. As a rough guess (since I don't have the viewing share figures that Sky used to calculate the rate), the PSB rate is something like 1/3 (based on the relation between ITV1 and ITV2's viewing figures of that week, and the rates charged). But it's still far too high.
I have now read that the reduction in the fees was in exchange for iplayer access on anytime+.
I also understand that the BBC is considering the reduction in regional areas available on satellite. I wonder if this is so they can have regional HD for BBC 1 HD using fewer transponders.
Firstly - where was it documented that the reduction in EPG fees was in exchange for iplayer access on anytime? I thought the iplayer access was agreed back in January; and why should the reduction of BBC affect other PSB providers?
Secondly - what is your source of information for the proposed reduction of BBC regional areas on satellite?
Thanks for the link - I imagine the BBC would want to reduce number of regions for general cost reasons anyway - all those offices for staff, and all those transponders showing exactly the same programmes except for about 45 minutes per day.