- ITV sells its media and entertainment divisions to Sky
- £1.6bn deal marks big change for British television
- Analysts say viewers could expect Sky and ITV’s offerings to merge in the future.
The UK’s TV landscape has just changed massively – ITV announced it has agreed to sell its media and entertainment business to Sky in a massive £1.6bn deal.
The deal makes it one of the biggest deals in UK media history. It will see Sky take over the ITVX platform and ITV’s free-to-air channels, but does not include the production arm of ITV Studios (which makes companies such as I’m a celebrity and Mr. Bates v. Post Office).
So what does all this mean for the average citizen? Downton Abbey Sky fan or subscriber? Will ITV channels still be free? And what does it mean for current and future shows on both platforms?
Here are some of those big questions answered by media and broadcasting experts…
Will ITV continue to be free?
Yes, at least for the foreseeable future. ITV has public service broadcasting commitments from its license that extend until 2034. The deal with Sky does not change that.
Tom Harrington, TV analyst at Enders Analysis, says the fact that ITV is free-to-air is also probably one of the main reasons for the potential deal. “ITV remains profitable and the reach it has as a leading commercial broadcaster is probably the main reason why it would be attractive to Comcast/Sky.”
However, Sky’s focus could increasingly shift from ITV’s streaming offerings to its online streaming platforms and could ultimately see ITVX and NOW TV merge.
“Online video advertising remains a key area of growth, as audiences increasingly turn to the convenience of the extensive catalogs available through streaming. As such, monetizing this space is essential to broadcasters’ current strategies,” said Peter Ingram, research director at Ampere Analysis.
“The sale of ITV to Sky will likely lead to an acceleration of the development (and possible integration) of streaming propositions such as ITVX and NOW with a focus on expanding online video subscriptions and advertising revenues,” he added.
In other words, expect ITVX and its ITVX Premium subscription to become Sky’s main focus. It is not that traditional open television is going to fall by the wayside.
“ITV’s linear operations could be rationalised, but key assets will be retained to continue monetising the still sizeable audience loyal to linear television,” added Peter Ingram.
What could this mean for current television shows?
There are unlikely to be any major changes in the short term for ITV or Sky viewers due to existing agreements and contracts. But one thing you can expect to see is more ITV shows on Sky and vice versa.
“One immediate impact from a combination could be an element of integration of Sky and ITV’s programming assets,” predicts Peter Ingram of Ampere Analysis.
“The two companies are among the biggest spenders on content in the UK, with ITV providing a range of locally resonant programmes, news and sports rights. Sky offers local and international first-run and library films and TV series, major sports rights (such as Premier League football) and news. The two operators could use some of these programming assets in a combined entertainment ecosystem to greater effect,” he added.
However, Enders Research’s Tom Harrington told us before closing the deal that changes could be slower. “From a viewer perspective, in the short term there probably won’t be many noticeable changes – ITV and Sky’s offerings will remain similar,” he said.
“Over time, Comcast/Sky may have different views to ITV’s current direction on how to monetize free-to-air and there could be channel changes and a different approach to ITVX,” he added.
The nature of the deal, which does not include ITV’s production arm ITV Studios, could also affect the type of shows seen on its channels. ITV Studios produces programs such as love island and I’m a celebrity… Get me out of here and The Voice. Some analysts predict they could one day find a different home.
“ITV Studios’ biggest customer is ITV itself, and more than half of what ITV watches comes from shows it produces at the studios,” Harrington explained. “So if Comcast/Sky were to acquire ITV Broadcast, then we would assume it would include a long-term deal ensuring the flow of content from ITV Studios to the channels/ITVX,” he said.
“However, even with some form of agreement, over time it could be anticipated that the relationship between these two parties would weaken from current levels,” he said.
Is this good news or bad news for viewers?
It is still too early to draw definitive conclusions about the agreement. However, experts have highlighted three potential impacts that are broadly good, bad or mixed.
Given past mergers, there is reason to be concerned about TV quality, according to Tom Harrington of Enders Research. “Generally, in a merger/acquisition like this, the result is that less content is produced overall, as savings and efficiencies are immediately sought. Therefore, overall there may be less supply, although this may not necessarily be obvious to the viewer,” he said.
Still, the positive is that the television shows that are made could be more available. “You could imagine that Sky might want to use Sky programming on ITV and vice versa. So certain viewers may have access to programs and some sports that they may not have had access to previously,” he added.
Peter Ingram of Ampere Analysis is also a little more optimistic about the long-term health of TV shows on both ITV and Sky. “The greater scale provided by the group’s presence in television and streaming would facilitate an even stronger revenue base, enabling the production of more high-quality original programming for UK consumers,” he predicts. Let’s hope so.
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