Press Office

Wednesday 29 Oct 2014

Press Release

Independent report concludes UK system of retransmission fees is "the least favourable in the developed world"

Public service broadcasters in the UK face the least favourable system of retransmission fees in the developed world, according to a new independent report by media analysts Oliver and Ohlbaum.

The report, PSB Network Platform Re-Transmission And Access Charges In The UK: The Case For Change, shows that UK broadcasters have to pay for the content they provide to broadcasters without regard to the value of the content they provide, while other broadcasters across the world are paid by the platform operators.

The report also concludes that if the UK adopted the US system of payments, it would enable up to £96m more a year to be spent on content by public service broadcasters. However, the report warns, without any reform to the UK system, in future the amount diverted from UK content to platform providers would increase further.

Report author Mark Oliver, Chief Executive of Oliver and Ohlbaum Associates, said: "The UK clearly has the least favourable system for free-to-air broadcaster retransmission in the developed world.

"UK PSB broadcasters have an obligation (implicit and sometimes explicit) to be available to all TV households and therefore cannot in practice withdraw their services from any major TV platform. This gives platform providers significant leverage in commercial negotiations. The current regime for setting access fees to platforms such as Sky does not adequately address this imbalance in leverage between platforms and PSB channels."

John Tate, Director of Policy and Strategy for the BBC, said: "These charges were agreed many years ago in order to help satellite broadcasters justify the investment they needed to build their platform. The question now is whether or not this money is still flowing in the right direction.

"If we did not have to pay Sky we would save £50m over the remainder of the licence fee period and that could go back into programme making – it would for example cover all the costs that we are currently planning to take out of local radio and BBC Four combined."

Today's report found that there are typically three types of contributions made by platform operators to free-to-air broadcasters – copyright fees; the incremental cost of transmission; and carriage or access payments. The UK is the only country with a developed market where none of these contributions are made, and where the value of free-to-air services to the platform operators and their wider public benefit is not recognised.

The report analysed five potential alternative systems of access charges. It concluded that requiring platform operators to carry content without levying a fee on channels is the simplest solution. It also identified the opportunity to create more complex regimes which could create more investment in programming.

Notes to Editors

The full report is available at About The BBC: Reports – Retransmission And Access Charges Review

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