Lack Of Carriage On Digital Satellite Could Lose ITV Companies £8m Per Quarter

Despite the fact that the new ITV licence fees, due to be announced within the next few days, are expected to be higher than before, it is thought that the channel’s continued lack of carriage on the digital satellite platform could have more serious financial implications for the channel in the short term.

Those ITV franchises which have yet to renew their licences have to do so by 1 April. Licence fees are expected to rise initially, but since the largest element is payable only on analogue advertising revenue, this should fall over time as analogue switch-off approaches. The time it takes to achieve the necessary level of digital penetration to go ahead with switch-off is expected to affect ITV’s broadcasting profits, which would see more slow down in growth the longer it takes.

In the short term, the longer it takes ITV to secure carriage on Sky Digital, the worse the effect on profit. ABN AMRO forecasts that every quarter that satellite carriage is delayed from the end of June this year will cost the ITV companies around £8m in foregone profits. This week the prospect of these losses was reduced a little with the announcement of a carriage deal with satellite operator Societe Europeenne des Satellites (SES) (see ITV Signs Digital Satellite Deal).

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