ITV Has Licence Fees Slashed
ITV’s annual fee payable to industry regulator, Ofcom, has been cut by £135 million to less than £80 million, as part of a review into licence fees by the watchdog, which takes into account the increasing growth of digital TV.
The broadcaster paid £215 million for its 12 licences in 2004, astounding city analysts who predicted Ofcom to drop the fee to between £90-95 million (see ITV Set For Massive Licence Fee Cuts).
ITV welcomed the news, with Charles Allen, ITV chief executive saying: “These terms mean a very significant reduction in licence payments for ITV plc this year, with further steady reductions to come.”
Allen announced plans to invest money saved in the review into ITV’s digital family, intending to put around £1 billion into the broadcasters digital offerings.
He said: “Across ITV1, ITV2, ITV3, ITV4 and the ITV News Channel, ITV will invest around £1 billion in high quality programming this year. It is critical that ITV has the firepower to sustain this investment and take forward its digital strategy.”
The new agreement, spanning seven years, will take ITV through the digital switchover process, ending in 2012, when the analogue signal is due to expire.
Cuts to ITV’s fees have been rumoured for several months, although the broadcaster also contributes around £250 million through the public service broadcasting quotas included in its franchise term.
Allen added: “The last six months have seen the successful completion of the Ofcom PSB review and now the review of financial terms. But the modernisation of ITV regulation is not complete, with a number of important issues still to be addressed.”
Elsewhere, Scottish Media Group (SMG) has also had its licence fee reduced, with fees payable for Scottish TV and Grampian TV dropped to between £1-1.5 million for 2005, compared to £4.5-5 million last year.
SMG welcomed the news, with Andrew Flanagan, chief executive of SMG saying: “We’re pleased that Ofcom have recognised that in the increasingly competitive world of multi-channel television our licence fee tax costs had to come down.”
He continued: “This settlement, along with the outcome of the Public Service Broadcasting Review, serves to secure the future of the Scottish TV and Grampian TV franchises to 2014 – through digital switchover and beyond.”
ITV: 020 7843 8000 www.itv.com
Ofcom: 020 7981 3040 www.ofcom.org.uk