iNVEZZ.com, Monday, September 8: ITV Plc (LON:ITV) has renewed its calls for British Sky Broadcasting Group Plc (LON:BSY), Virgin Media and other major pay-TV broadcasters to pay UK public service broadcasters (PSBs) fairly for the transmission of their channels.
The broadcaster cited a recent report by NERA Economic Consulting showing that this type of payment model, known as retransmission payments, has contributed significantly to the new “golden age of television” in North America.
In today’s trading, ITV shares were down 1.1 percent at 217.90p, as of 15:37 BST. The company’s stock has risen 12.4 percent since the start of the year.
Under the “retransmission consent scheme” as introduced in the US in 1992, free-to-air broadcasters are paid for delivering content to competing platforms. ITV pointed out that, according to the report, last year US broadcasters received around $3.3 billion in retransmission payments, amounting to less than three percent of cable operators’ revenues. The company argued that the model should be adopted in the UK.
ITV’s chief executive officer Adam Crozier commented that the introduction of retransmission fees in the UK “would have clear benefits to the UK creative industries and the wider economy - as well as to viewers right across the UK - by enabling PSBs to continue to invest in the original programming people love to watch”.
Crozier added: “The majority of viewing on these Pay-TV platforms is PSB programming yet ITV, whether as producer or broadcaster investing in creating that content, doesn’t receive any payment – despite the fact that Pay-TV platforms pay commercial terms for other channels.”
ITV also noted that UK PSBs invest around £3 billion in programming, with ITV alone spending almost £1billion a year.
In response to the ITV calls, BSkyB argued that the UK market differs from the US because of regulatory privileges granted to public service broadcasters.
Analysts on ITV
According to the Financial Times, the 24 analysts offering 12 month price targets for ITV have a median target of 231.50p, with a high estimate of 270.00p and a low of 175.00p. As of 5 September, the consensus forecast amongst 49 polled investment analysts covering ITV has it that the company will outperform the market. This has been the consensus forecast since the sentiment of investment analysts improved on 7 May this year, the FT notes.
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