Paying Sky for free public service television channels
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?
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 - guardian.co.uk , 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 broadastersSo, 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.
Mike Dimmick: Following Broadcasting territorial exclusivity with a decoder card is contrary to EU law | ukfree.tv - independent free digital TV advice it now quite arguable that channels that operate in Europe are breaking the law if they restrict their output to a single country, rather than the whole of the EU, thus rendering Sky's system to allow for your point 2 ("to avoid rights issues that would involve paying more for programmes") unlawful as there is now clearly legally one territory - the EU.
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