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The BBC wants to stop paying Sky ten million pounds a year for EPG listing

A few weeks after I brought the subject up, the BBC have announced that their supply of programming and EPG information to Sky should be free, because the public service channels are more than half of what people actually watch on Sky.

A few weeks after I brought the subject up, the BBC have announ
published on UK Free TV

Six weeks ago I wrote a an article about how much the BBC is Paying Sky for free public service television channels

Today on The Media Show: BBC savings strategy (see 17:30) the BBC have announced they are not going to put up with it.

Below is a transcript of the two interviews from the programme between award-winning Steve Hewlett and the BBC's John Tate and consultant Matthew Horsman from Mediatique.

Steve Hewlett: The BBC and Sky look set to fall out over something else, BBC strategy chief told us in that interview. The BBC has commissioned a firm of consultants to look at what the corporation pays sky to carry BBC channels on the sky platform.

The report recons it is about ten million pounds a year that a) takes no account of the value of having the BBC channels there in the first place and b) is unlike the position in comparable market where they say that other cable satellite and other platform operators pay so called retransmission fees to free to air broadcasters for the right to carry their channels

This is what John Tate told me

John Tate: I think sky does excellent job they have taken a lot of risks and they are putting money into UK original content they increasing that money and I welcome that I think however in the context of a very tight licence fee settlement payment from us to them for retransmitting what are to them are highly valuable services is not appropriate.

SH: so is that now the BBC's formal position going into the communications act?

JT: well we said some time ago, the dg said quite clearly this areas needs looking at. And I think the other public service broadcasters channel four and five and ITV would also want it looking at.

SH: Have you discussed it with them?

JT: Yes, we have discussed it with them. I think we would all agree that the current system is an anomaly. You know, various measures were taken to get satellite started in the UK, and this was one of them and satellite is very healthy and they are making billions of pounds every year and next to that profitability and our constrained licence fee we need to look again at this particular concession.

SH: Will you want the government to legislate that you no longer have to pay sky and virgin for carriage?

JT: You could consider it deregulation, in the sense of allowing an open conversation to take place

SH: why can't this just be done by normal commercial negotiation? If the value to sky is as significant as you say it is from having BBC's channels on its platform and I can see why it might be they wouldn't want people exiting the sky platform to find BBC somewhere else, reducing the customer experience. If it is of value to sky as you say, merely threatening to take it away should produce a commercial outcome.

JT: That a good question. The government might want to consider if it should be left to a commercial conversation.

SH: Sky would say "if you are going to compel us to carry it pay us for doing it".

JT: I think if it were a commercial negotiation, the balance of advantage is to sky for taking those channels. That should be reflected in the arrangement. The dg has said we are not looking for payment in the case of the BBC, others can state their own positions, and we would look to not having to pay these retransmission fees.

SH: over the course of the licence fee settlement between now and 2017, if this change was to be enacted as you and the other public service broadcasters want, how much revenue it save the BBC?

JT: It is the equivalent of not having to make the reductions in output local radio plus the reductions in BBC four to give you a service-related figure. Overall fifty million pounds over the period.

SH:And what would you do with the fifty million pounds if you had it back.

JT: We could mitigate the cuts I have just described - we would not have to make them.

SH: In our earlier discussion some of these cuts sound like good sense in any event.

JT: I have been very clear that there are cuts in outputs that we would not have made but for the new licence fee settlement and it are those areas that the money we pay sky to broadcast our channels could be put to much better use.

SH: ten million pounds a year minimum could be spend on local radio and BBC four. So is he right or is his playing politics? Sky were unable to join us but they gave us this statement:

"The BBC chooses to buy platform services that enable it to provide a wide variety of services on the satellite platform. As with any broadcaster that uses our platform we ask for a 'fair and proportionate' contribution to its running costs. Of course if the BBC no longer wants to buy these services from us, it is free to stop doing so at any point, but these are legitimate costs which are regulated by Ofcom. All broadcasters who choose to use platform pay them. We don't see the BBC as being the exception to this principle, no one expect the national grid to provide the BBC with cheap electricity subsidized by its other customers so why is sky any different?"

Matthew Horsman is a man who understands these things. Can you in "idiots guide" terms explain what this ten million pounds?

Matthew Horseman: The ten million pounds is the charge that Sky makes to ensure that the right BBC service is in the right region of the country - SO that is the starting point.

SH: SO all the BBC one regions are all carried on sky?

MH: they are all carried and wherever you happen to be in the country the set box will get the right service and in general it is a way of ensuing that the service gets from where the BBC gives it the transponder the uplink all the different things that go on technically and then it subsumed into the sky platform so anyone who has sky TV gets their BBC service on channel 101.

Sky BBC and ITV regions map
The twenty-million pound a year Sky map

SH: so why shouldn't the BBC pay for this?

MH: right now it has to and everyone does by the way, not the BBC all the mainstream public service broadcasting channels and indeed any channel that wants to go onto the sky platform that isn't retailed by sky, isn't part of the pay of the pay TV package that sky sells onto the consumer have to pay their share Ofcom has deemed to be an allowable recovery again sky's investment in the platform.

SH: but the argument from the BBC then that leave aside what is costs sky to host the BBC services that sky is paying nothing to reflect the value of those services to sky?

MH: here is where the BBC completely has a point. Sky's viewing for instance is pretty indicative of this. On the sky platform that has 400 channel services, the core public service broadcasters - BBC 1, 2, ITV1, channel 4 and channel 5 represent 50% - that's half - of all viewing in sky homes. If you add in the extension channels, BBC3, BBC4, ITV2, 3, 4 etc, it is more than 60%, so Sky obviously benefits a great deal from having the channels that people want to watch incorporated into its consumer boxes.

SH: all sky viewers are also licence fee payers, they have no choice but to do that this content is already paid for by sky's customers, so why shouldn't they get it "free" on sky as they do everywhere else.

MH: This comes to the larger point that Mr Tate was making in his comments the BBC is a bit different from the rest of the public service broadcasters, but look broadly why this argument has come up, and what Tate said other countries actually have a regime where free to air channels, give the US as an example, NBC, CBS, ABC those are all paid by cable operators to be retransmitted;

SH: in a nutshell - what is going to happen here?

MH: there needs to be some kind of guidance from the government either in the comms bill or as secondary legislation that says that sky is obliged to pay fees or the parties are commercially able to negotiate fees with the backstop of saying they still have access to the platform with appropriate prominence and "must carry" legislation in place. We think the end games is that sky will end up not being paid by the BBC and having to pay the other channels.

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Sunday, 16 October 2011
Ian W.
3:10 PM

I suppose if BBC channels were not on the Sky EPG there would be more TV license evasion by people claiming they could not receive the service they are being told to pay for.

Now I know this would not hold up in court, but the BBC must be aware that the reduction in revenue and the need to increase enforcement could have an impact on their finances.

I suspect that some compromise will be reached.

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Ian W.'s 17 posts GB
Les Nicol

5:37 PM

Steve - Ian W. in part that is correct as the BBC contract to lease transponders directly with SES Astra and Eutelsat as well as other satellite operators covering other parts of the globe. They do however sub lease transponder capacity from SKY also. Although in the main as far as the UK is concerned the BBC transmissions are beamed from Astra 2D.with a direct leasing contract with S.E.S. Astra. Both the SKY and the "Freesat" EPG's are actually beamed from Eutelsat's Eurobird 1 at 28.5 degrees South East with program content coming from the four satellites positioned at near enough the same orbital position. What Satellite Magazine gives in it's "Guide to Euro Digital Channels" a clear breakdown of what comes from where and the leasing of transponders by whom including any sub contracted arrangements by other broadcasters with bskyb.

Ian - It is the TV Licence Authority that is responsible for the collection and any evasion of payment in respect of the licence fee not the BBC.

I rather think that what may come out of this is the SKY EPG charges being dropped in the case of the BBC with the BBC agreeing to wave any program content charge for the re-transmission of such on the SKY platform.

Looking at the wider aspect of this in relation to ITV etc it may be that with the likely hood of in their case an EPG charge remaining that they could be quite entitled to charge for the re-transmission of their program content.

Finally it's the UK that are out of step here with other broadcasters globally. For example DurecTV in the US also within the News International Stable are required to pay re-transmission charges in respect of for example CBS, NBC an ABC.

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Les Nicol's 991 posts GB
Les Nicol

5:46 PM

Steve P - Ian W. Apologies for the mispelling in the last paragraph - DurecTV should read "DirecTV"

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Les Nicol's 991 posts GB
Les Nicol

6:21 PM

Brian - This one's for you. I see that the BBC are leasing a Transponder on Intelsat 907 at 27.5 degrees West. There are 9 SD BBC channels comprising 5 regional channels BBC News and Parliament, CBBC and CBeebies also 1 HD channel together with HD output from ITV and Channel 4. The Spot Beam range seems to cover South America as far south as the Falklands. Would you care to shed some light on the target group relating to this?.

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Les Nicol's 991 posts GB

7:05 PM

Les Nicol: As I recall, that is the "backup of the backup of the backup" satellite service for Freeview.

It comprised of "ready" data for the BBCA and BBCB Freeview multiplexes.

All main transmitter sites are fed via diversely-routed fibre networks. If these fail, they can then take the service from I907 as a backup - the data is a "ready to go" service to fill two Freeview multiplexes.

As I recall, this shows up in the BBC Engineering information as "reduced quality" as I think the actual total bitrate is below the usual.

Also, as this is a single "emergency" service it has no regional services, so whereever in the UK it is used, the news will be for London.

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Briantist's 38,844 posts GB

7:08 PM

Les Nicol: The normal bitrate for BBCA is 24Mb/s and BBCB is 40Mb/s.

It is important to note that the BBC can't use the "normal" Astra services for the backup as demultiplexing and re-multiplexing would require equipment too expensive for a backup system.

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Briantist's 38,844 posts GB

7:12 PM

Actually, it's not just the line-fed sites that can use I907, but all sites.

The official BBC FAQ says

"Why does BBC One in my region sometimes show BBC London News instead of my usual local news programme?

In areas of high atmospheric pressure, or atmospheric turbulence caused by very heavy rain, the effective range of signals between transmitters can be reduced, so the terrestrial transmission chain is broken.

Alternatively, there may be a technical fault in your local area.

Your local transmitter will detect this and, rather than show a blank screen, will default to programming from the London region which has been sent to your local transmitter via satellite.

Note: The BBC News channel simulcasts with BBC One at certain times of day. If BBC One shows local news during these times, BBC News - which has only one nationwide feed - shows London programming."

Additional notes:

If we were to support a complete mux for each region (thus allowing a TV signal to continue without retune or drop-out), that would mean 16 complete new uplinks and a stupendous amount of money to deliver it.

Alternatively, we could take a regional feed from the 'consumer' feed on astra (freesat/sky) and rebuild the mux for each region (and relays) but this would require de-muxing and re-muxing equipment in around 2000 transmitters.

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Briantist's 38,844 posts GB

7:33 PM

Les Nicol: I don't think the 11495 V
tp 64 listing on Intelsat 907 at 27.5W - LyngSat are at all accurate.

For a start the SD services have to be MPEG2, it lists the daytime CBBC/CBeebies but not BBC three/FOUR and seems to have the random "RT Raidi na Gaeltachta" in there.

Also, "301" is not listed, and the radio services are "BISS", whereas they should be MPEG2 audio-only.

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Briantist's 38,844 posts GB
Monday, 17 October 2011
Mike Dimmick

11:45 AM

Briantist: See Intelsat 907 (27.5°W) - All transmissions - frequencies - KingOfSat .

It carries four national variants of BBC One, one of BBC Two, and all the other parts necessary to assemble both pre-switchover Mux 1 and Mux B (less Sky Sports), and post-switchover BBC A. Significantly it has 301 on there.

In addition, it carries the commercial HD channels ITV1 HD, Channel 4 HD, S4C Clirlun and STV HD, in order to assemble BBC B.

As for the service type identification, I would think that's deliberately wrong to stop your average home decoder from tuning in.

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Mike Dimmick's 2,486 posts GB

1:31 PM

Mike Dimmick: Thanks.

Yes, that does seem more like the correct list.

From what I was shown the bitrates are restricted to allow the Freeview multiplexes to be reconstructed, so I would assume there isn't much in the way of statmuxing going on.

It is interesting to note that I907 is the only place where S4C Cirlun is on satellite.

The odd thing though, is that the BBC must not yet have fitted this at ALL sites, because sites get taken off air when the 'parent fails' such as Combe Martin with Huntshaw Cross in the last few days.

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Briantist's 38,844 posts GB
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