BBC Propose Payment Flip For Sky Channel Charges

In what many might call a bold move from the BBC, the national public broadcasters are rumored to be planning, potentially alongside their fellow terrestrial channels, an initiative to force Sky to charge them for the retransmission of their channels, a reverse of the current situation in which the networks are forced to pay a substantial fee to the UK’s satellite broadcaster to see their place in the EPG secured.

skiplayer_odoptionsCurrently forced to pay £5m per year to Sky (fellow ‘terrestrial’ broadcasters ITV, Channel 4 and Channel 5 pay a combined £5m between them), the BBC have felt that for all the money Sky earn from satellite subscriptions, key content providers should be compensated, as opposed to paying primarily to be a part of another company’s profits.

BBC director of policy and strategy John Tate said: “Sky should do the decent thing and stop charging licence fee payers to carry BBC services that, in reality, underpin their ability to generate enormous profits. This free ride needs to stop.”

The ‘free ride’ comment is ironically in exact contrast to an opinion a Sky director offered in 2011, with his claim that retransmitting BBC content without charge would be giving the corporation ‘a free ride’.

Away from two-word cliches, a ‘senior BBC source’ explained their newly-public stance to The Guardian, stating: “These costs are a hangover from the early days of satellite television and for a long time now they have felt like money flowing in the wrong direction. At a time when public service broadcasting is under increasing financial pressure, we have to do everything we can to protect the licence fee or to police how the licence fee is being spent.”

The BBC will also have the support of their fellow ‘Big 4′ free-to-air broadcasters, as a spokesman for ITV added: “We welcomed the [culture] minister [Ed Vaizey’s] statement earlier this year in relation to retransmission fees. We do not believe that this regulation is in keeping with the competitive market place we are in today.”

A Channel 4 spokesperson offered their channel’s backing to the proposals as well, adding: “We do not believe that the current regulatory system appropriately recognises the benefits that public service channels bring to platform operators. Were the system amended to appropriately account for these benefits, there is strong evidence to suggest that PSBs could receive positive carriage fees.”

Ed Vaizey, the culture minister referred to in ITV’s argument, had noted in his speech earlier in 2013: “I welcome the steps Sky have taken so far to reduce retransmission fees to a much lower level [from £10m to the BBC in 2010]. But we want them to go further, taking into account the undoubted value that PSB’s offer to satellite platforms and their viewers, so that there’s a level playing field: zero fees either way.”

With the other major pay-TV platform in the region (Virgin Media) not inconveniencing the main channels (with no charge either way for the Big 4), Sky appear to have less of a leg to stand on in the argument with every passing blow, so in a battle where a cost-less compromise seems unlikely to occur, will the satellite provider give the BBC what they want, or could the UK’s biggest channel do the unthinkable and lead a network revolt if they are continued in being forced to pay annual retransmission fees?

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