ITV share price: Ofcom raises doubts about introduction of retransmission fees

on Jul 3, 2015
Updated: Oct 21, 2019
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ITV Plc (LON:ITV)suffered a blow to its hopes of introduction of “retransmission” fees after Ofcom said that the implementation of such fees would probably require “complicated and lengthy” regulation. Yesterday the UK’s telecommunications regulator published the conclusions of its third review of public service TV broadcasting, in which it raised doubts about the idea that pay-TV firms should pay for carrying public service broadcasters’ channels.

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ITV has urged the watchdog to introduce retransmission fees, which are common in the US and could provide a substantial new revenue stream for PSBs. Research firm Liberum Capital has estimated that the introduction of such fees could result in up to £140 million a year in extra revenue for ITV.
While Ofcom admitted that the fees would give PSBs additional funding to fulfil their obligations, such as news and children’s programming, it argued that such a move would be met with strong resistance by subscription TV operators such as Sky and Virgin Media, which do not have to pay to carry these channels at the present.
“[R]esolving any possible disagreements would probably require complicated and lengthy regulatory intervention,” the watchdog said in its review. Ofcom also pointed out that “There is currently no guarantee that all fees would be spent on public service programmes”.
Despite Ofcom’s negative view on the matter, retransmission fees could still happen, as the decision on whether to introduce them in the UK rests ultimately with the Government, which has promised to that it will take “a long, hard look” at the issue. The Government’s consultation on the subject is still ongoing and is not expected to be completed until later this year.
In today’s trading, ITV shares were up 0.6 percent at 265.00p, as of 11:29 BST. The stock has risen 23.1 percent since the start of the year and the company’s market capitalisation currently stands at £10.8 billion.
As of 13:42 BST, Friday, 03 July, ITV plc share price is 264.35p.

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