Five Sees Licence Fees Slashed By Ofcom

Ofcom has reduced, Five’s, licence fee payments by a massive 30% to £9 million for 2005, signalling the Government watchdog’s awareness of the pressures on broadcasters due to the impending analogue switchover and multi-channel programming.

The new terms mean the cost of Five’s analogue licence has been reduced by 64% over the last three years, down from £25 million in 2002 to £13 million in 2004 prior to the latest cut.

Five welcomed the news, stating: “We accept the financial terms for the Five licence as proposed by Ofcom. We believe that this new settlement will act as an increased incentive towards building the digital future and will strengthen our ability to contribute to public service broadcasting.”

Earlier this year, industry sources speculated that Five could launch a women’s lifestyle channel in an attempt to strengthen its digital offerings as terrestrial programmers prepare for the impending digital switchover (see Five May Launch Digital Channel).

Rumours have also circulated that the broadcaster is plotting a dedicated children’s channel, built around its early morning Milkshake strand, although no final decision has been made on whether it will become a reality (see Five Eyes Expansion With Digital Children’s Channel).

As rival broadcasters move to bolster their programming strategies with a raft of digital offerings, Five has been criticised for being left behind, remaining the only terrestrial channel with no sister stations.

In its review, Ofcom also cut ITV’s licence costs, slashing the broadcasters annual fee payable to the industry regulator by £135 million, to less than £80 million (seeITV Has Licence Fees Slashed).

Scottish Media Group (SMG) has also had its licence fee reduced, with fees payable for Scottish TV and Grampian TV dropped to between £1 million and £1.5 million for 2005, compared to £4.5 million to £5 million last year.

Five: 020 7550 5555 www.five.tv Ofcom: 020 7981 3040 www.ofcom.org.uk