On my commute to work this morning, I saw a digital outdoor sign advertising a programme on Yesterday. I can’t recall the programme, but I can tell you that at the bottom, a large blue strap had added “Not available on Virgin Media.”
That feels like quite a hardball move from Virgin Media, since once those channel slots are gone, they’re unlikely to return. It’s obviously supposed to drive UKTV back to the negotiating table.
However in the meantime, The Guardian is also reporting that ITV and Virgin Media are also in dispute, with ITV reportedly suggesting it might pull all its channels from the platform by this weekend. Loss of ITV would be massive, with the channel responsible for lots of the biggest programmes on television. Even the loss of ITV2 on its own, at a time when Love Island continues to ride high in the ratings, is enough to make most platforms reconsider.
You suspect that ITV is pushing home a strategic advantage at a time when Virgin Media is already weakened from a consumer perspective with the loss of UKTV’s channels. If ITV’s channels were to drop off the platform, then there’d be a massive hole in what Virgin Media is offering viewers.
Certainly, most of those channels would remain available to viewers on Freeview, but the loss of on demand and recording functionality, along with the annoyance of having to flick around to jump between DTT and Virgin Media, is a disincentive.
This seems to be the result of an ongoing dispute between Virgin Media and ITV going back months. Last year, the Telegraph reported that ITV wanted between £45m and £80m in retransmission fees following a change in the law.
In April last year, the 2017 Digital Economy Act came into law, and it allowed for retransmission fees from cable operators – but notably, not satellite. Fees paid to broadcasters for otherwise free-to-air channels are the norm in the US, but hadn’t been the case in the UK. Indeed, broadcasters tended to have to pay platforms to ensure their services were covered.
This had become something of a bone of contention among commercial broadcasters, and ITV has been moving ahead most strongly.
As well as fees, prominence in the EPG and how catch-up offerings are presented are likely to form part of the negotiations. (As an aside, I note that Sky has recently been giving significant promotion to BBC programming, something it has not previously done on a regular basis).
The fees issue with UKTV and retransmission fees issue with ITV suggests that Virgin Media, under owners Liberty Global, is playing a really tough game at the moment, beating down channel suppliers as much as possible.
Losing ITV as well as UKTV could be a massive challenge for Virgin Media. I would imagine that groups like Sky and BT TV will be moving up their summer advertising campaigns (usually built around the upcoming football season) as a result.[UPDATE] – It’s really worth listening to Virgin Media and UKTV slug it out on-air in this week’s episode of The Media Show. Both sides make their case, with Virgin Media very happy to carry the free-to-air channels for no money. UKTV want to sell them the entire package of channels – free and paid for. From their perspective, Virgin Media charges viewers to receive the channels, so they should get some subscriber money.
There was no mention of plans to sell off UKTV’s slot numbers. Nor was there any mention of ITV’s dispute, although that only really re-emerged following the programme’s recording.