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Paying Sky for free public service television channels

Try this: pop out to Tesco and when you get to the checkout, demand that they pay you to take the goods away. When they ask why, say "I work for Sky".

Try this: pop out to Tesco and when you get to the checkout, de
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Whilst I was at the Edinburgh Television Festival once, waiting for a lecture from the Minister for Fun, I was chatting to a co-attendee.

During the conversation he told me a rather jolly marketing anecdote.

There are three DIY shops on a high street, all selling hammers. The one on the left, wanting to increase sales puts a big sign up in the window: "ALL HAMMERS 50% OFF".

The shop on the left, not wanting all the custom to go the competitor, ups the ante. "ALL HAMMERS HALF PRICE".

And the shop in the middle, what banner does it put up?

people out shopping on escalator


I was remind of that when I read recently the article, Channel 4 and ITV challenge Sky over data it gleans about their shows - Media - , and considered the amount Sky charges, and the channels people actually watch.

For example, almost three quarters of viewing of TV channels is to free-to-air channels provided by the main public service broadcasters, the BBC, ITV plc, STV, UTV, S4C, Channel 4 and Channel 5.

No subscription or other ongoing payment is required to watch these channels. (Figures from BARB, July 2011 Monthly Total Viewing Summary).

However, the next set of channels do cost if you have Sky. The "platform access cost" is £234, and for the full range of non-premium channels, it is £294 a year.

The Sky Sports channels (viewing share 2.7%) cost an extra £243 each year. The Sky Movies channels (viewing share 1.5%) costs an extra £192 a year.

However, the final 5.8% of viewing is of free-to-air channels:

Sky's charges to other broadasters

So, you would think that Sky would be very grateful to the public service broadcasters, because all their content is what people actually watch most of the time. All the public service broadcasts on satellite are using transponders the broadcasters have obtained directly from SES Astra - Sky do not own the satellites, they also rent their capacity from SES Astra.

However, as Mike Dimmick (thanks) points out, after looking at this - BSkyB and SSSL Published Price List - 30 October 2009 this is what Sky charges (yes, CHARGES) the BBC to list their free-to-air programmes in the "Sky Guide":

EPG listing charge: £21,000 per TV channel per year, £16k per radio channel per year. The BBC list 11 TV channels excluding the 20 regional variations of BBC One and Two, and 18 radio channels. That's £231k for the non-regional plus £420k for the regional slots, and £288k for the radio stations, £939k total.

Then there's a 'Platform Contribution Charge' which seems to be set on viewership. For the BBC:

  • BBC News Channel £994,310
  • BBC1 £4,771,505
  • BBC2 £1,261,600
  • BBC3 £994,310
  • BBC4 £310,055
  • CBBC £342,130
  • Cbeebies £737,715

BBC Alba, BBC Parliament, BBC HD and BBC One HD presumably pay the £92k 'Other Television Channels' charge and the 18 radio stations the £6k charge. Total £9,887,625.

The BBC is probably paying Sky in the region of £11-12m for EPG services.

In most businesses, it is the business that has to pay for the data it uses. Newspapers don't charge the journlists for their reports. Marketing companies have to pay for address lists. You don't get paid a pound-a-minute for calling 118118. How Sky get away with this outrage is a very good question.

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Thursday, 8 September 2011

2:27 PM

David: Most high street electrical stores have "deals" to provide the installation of a dish and cables for a reasonable price.

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Briantist's 38,915 posts GB flag

3:41 PM

Think Argos was cheapest I saw at £80 last year.

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David's 306 posts GB flag
Friday, 9 September 2011
John P

11:21 PM

Surely the government should have made it legal that any channels that are free to air in this country should have free slots on any broadcasting format that has a significant audience market share. But for SKY to lose this small revenue source now would surely mean that the money would recuperated through another subscription increase.

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John P's 82 posts GB flag
Saturday, 10 September 2011

6:47 PM

John P: That might be the case if the government has any actual jurisdiction over SES Astra, but as a company based in Luxembourg this cannot be the case.

Indeed, being landlocked, it couldn't even use "gunship diplomacy".

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Briantist's 38,915 posts GB flag

7:12 PM

Would think it to do with Sky or the BBC etc. and not SES/Astra or the Owners of the Eurobird which is also used, as these Satellite owners are only hireing out to Sky and the other broadcaster.
It does get complecated more because different Broadcasters up link from other countries too so as to be covered by that countries broadcasting laws rather than those in the UK and Ofcom.

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David's 306 posts GB flag

10:59 PM

David: As it stands at the moment, the BBC *do* have a policy of being on every platform, because the Licence Fee is payable for any type of TV receiver equipment in the UK.

Channel 3 (and Channel 5) licensees have analogue and digital terrestrial commitments at the moment, but probably won't after 2012.

The Channel 4 corporation is a law unto itself, it has "gifted airspace" on terrestrial but the rest is up to the Corporation's board.

Anyone who runs and EPG is by law required to put the first five channels in the top five positions, but that's about it as far as the law goes, the rest is "up to the market".

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Briantist's 38,915 posts GB flag
Monday, 12 September 2011
Alvin Pritchard

9:20 PM

Sorry but SKY is indeed a rip off.
More and more consumers are switching over to the Freeview and Freesat boxes, and two million sales of these boxes should be enough evidence to prove my point.
With SKY's full HD package, your looking at £800 per year plus your regular TV licence on top and your nudging a grand!... That's a lot of money for most working class people.
SKY's boast of being able to receive 500+ channels is a white elephant considering that you can only physicality watch one programme at a time.
I saw the light and bought a HUMAX HD box, it did everything for me that Sky's box did minus a few hundred channels admittedly, but so what?
Around 80% of what i watched on SKY i can get on Freesat and i save a cool £52 per month to boot which now pays for my central heating oil instead of lining Rupert Murdoch's pockets!

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Alvin Pritchard's 40 posts GB flag
Sunday, 25 September 2011
5:45 PM

How can 10 million house holds in the UK willingly hand over seven Billion a year to The Murdoch empire but allow this government to cut the same amount from their Health service. They should really get their priorities right

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Kentman's 1 post GB flag
Friday, 21 October 2011
Mike Dimmick

5:42 PM

Kate: Ofcom regulates the charges that Sky can charge other providers to carry their sports and movie channels (wholesale charges). It does not regulate the charges that Sky is making for carrying channels in their EPG. That's why we're in this mess.

Encryption is a slightly complicated subject. Encryption can be used for two reasons:

1. To gain access to direct subscription revenue

2. To avoid rights issues that would involve paying more for programmes

The footprints of the earliest satellites in the cluster that carry the UK channels actually cover most of western Europe. You can see them at
(the pages are currently broken, hopefully they'll be back soon). The programme-makers - particularly films and acquisitions from the US - want more money if the broadcasts can be received anywhere in Europe. Encryption segregates the market, only allowing those with a UK viewing card to watch a channel intended for the UK, avoiding this problem.

Astra, with influence from the BBC, launched a new satellite Astra 2D in 2000 with a footprint only covering the UK and Ireland. This allowed the BBC to stop paying Sky to encrypt their channels and broadcast free-to-air. The EXACT SAME UNENCRYPTED transmissions are viewed by Freesat, Sky, and non-branded free-to-air boxes. There is NO encrypted copy of BBC One, Two, Three or Four on this satellite cluster. Later, Channel 4 moved all of their non-subscription channels here and ITV moved most of theirs, and there's also one version of Channel 5. Unfortunately, it's run out of capacity, so the other channels cannot move yet.

Even if you do encrypt, you may not get any revenue. There are 'free-to-view' channels such as 5* and 5 USA, where the operator has decided that ANY current or former Sky subscriber can watch the channel. It's encrypted, and you need a current-generation viewing card and a Sky box (because Sky's encryption method is proprietary), but you don't need an ongoing subscription. Sky call these 'Included Channels' on their website and indicate those that require the viewing card.

Of the traditional PSB channels, only a few regional variants of ITV1 and Channel 5 are encrypted, and those are 'included channels'.

On another page, Briantist claimed that transponder rental is about £4m per year. One transponder carries seven to nine SD channels or variants, or three to four HD channels, or of course a mixture, but on average maybe £500k for an SD channel. That said, there are 18 SD variants of BBC One, £9m.

Sky charge the BBC £5.6m for BBC One being on the platform at all, £25,000 for the EPG slot, and a very complicated charge I haven't fully worked out for regionalization, could be as much as £500k. But that is on top of the broadcasting charges that have already been incurred, for ZERO additional work on Sky's part.

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Mike Dimmick's 2,486 posts GB flag
Mike Dimmick

5:50 PM

I should add that there is a new satellite, Astra 1N, designed to provide more capacity for the UK and Ireland channels. One of its broadcast dishes has a footprint covering only the British Isles. It should have arrived at the cluster site in the last day or so, or if it hasn't, it will do soon. The rumour is that some of the 'free-to-view' channels will move across and become free-to-air, no encryption.

Channel 4 HD recently stopped using encryption and moved to the Eurobird 1 satellite which is a little further away, but still close enough to provide coverage. This is Europe-wide. They have decided it's better to pay the extra for content than to continue to pay for encryption. It may well move to Astra 1N once that goes into service, as Channel 4 have agreed to rent space on that satellite.

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Mike Dimmick's 2,486 posts GB flag
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