The conditional access agreement reached late yesterday means ITV1 will be available on channel 103 giving the Network access to Sky Digital’s 5.5 million subscribers, in addition to ITV Digital’s 1.4 million, with immediate effect. ITV2 will benefit from a 150% increase in distribution when it becomes available in the coming days.
As well as the boost in audience numbers, which will please disgruntled advertisers, ITV will also benefit from the ‘digital dividend’ rebate from the Government. This is given in return for converting analogue customers to digital and is expected to save ITV around £75 million per year.
“Over time ITV will also benefit from revenues from interactive programming and advertising,” said chief executive Stuart Prebble.
Both digital services launched late in 1998, but as the main ITV shareholders, Granada and Carlton, are also owners of ITV Digital (then ONdigital), ITV was reluctant to pay for carriage on the Sky platform. Sky Digital’s subsequent success has all but forced ITV to capitulate over the carriage arrangements.
The main sticking point in the negotiations seems to have been the price that ITV had to pay Sky to secure carriage; the deal is thought to be costing ITV around £13 million a year, although this is unconfirmed. Similar wrangles between the two groups are understood to be delaying the carriage of ITV Sport on the satellite platform.
Shares in Carlton and Granada were up 2p and 8p by early afternoon today.
