ITV claims victory in transmission fee changes but faces 'zero' gain

A change in broadcasting laws has encouraged ITV and other public service broadcasters (PSBs) to demand cable television providers such as Virgin Media to pay for access their free-to-air channels, though the outlook remains unclear.

On Tuesday the government announced changes to the Digital Economy Act that include scrapping a law that protects cable platforms from paying copyright or re-transmission fees to PSBs. Royal assent of the bill is due in spring 2017.

American cable giant Liberty Global bought Virgin Media in February 2013 for $23.3bn and also owns 9.9% of ITV. If the law is passed, ITV might enter into commercial negotiations with Virgin Media for it to broadcast its channel.

Other PSBs such as the BBC, Channel 4 and Channel 5 have lobbied to be paid fees from pay-TV organisations.

ITV said they could make £121m annually from transmission fees from Virgin Media and Sky, and Channel 4 said they could make £75m annually.

A spokesperson for ITV said: “We have consistently called for major pay-TV platforms to pay UK public service broadcasters fairly for the transmission of their channels ending what is effectively a multi-million pound subsidy - and this is clearly a welcome first step in that direction.”

“This is simply about ITV, and other PSBs, being paid fairly for their investment in original UK content so that we can continue to invest in the programmes viewers love.”

However, the government said it “wants to see zero net fees between the main platforms and the PSBs for the licensed PSB channels”.

Virgin Media said it "welcomes the government’s decision to reject a two year lobbying campaign by ITV and Channel 4 to charge viewers extra fees for watching programmes on cable and satellite that they’ve already paid for.”

The Telegraph said the proposed legal changes to the Digital Economy Act would not affect Sky as public service channels are provided free over satellite transmission and is covered by a different regime.

Shares in ITV were up 1.18% to 170p at 1049 BST on Wednesday.