Hit reality shows I’m a Celebrity and Love Island could become pay-to-view if Sky’s £1.6bn takeover of ITV goes ahead, insiders warned.
A tie-up between the pay-TV giant and the free-to-air commercial broadcaster, designed to create a UK-based streamer to rival Netflix and Disney, could be finalised within weeks, figures involved in the discussions told The i Paper.
However industry sources said competition authorities would have to examine the deal, which could reduce the range of programmes on ITV and even see the channel become part of Sky’s paid-for subscription package.
Dan Coatsworth, head of markets at AJ Bell, said: “ITV’s channels are expected to remain free to watch until at least 2034 under public service broadcasting licence terms. Beyond that point is a big unknown.”
“Sky is a subscription-led business, and its model is to collect money from membership packages and from advertising. The more money it can bring in, the greater the war chest to buy in content such as more sports, TV shows and films. That suggests it wouldn’t want a free broadcast service indefinitely.”
ITV has confirmed talks over a sale of its broadcasting arm to Sky in a deal that would value the division at £1.6 billion (PA)Would Sky/ITV green-light Mr Bates?
ITV’s biggest shows would survive but prestigious dramas like the award-winning Mr Bates Vs The Post Office, which lost ITV about £1m, might struggle to get commissioned.
“It’s likely that Sky would continue to show the big hits made by ITV Studios, as scrapping the likes of Love Island and I’m a Celebrity could see viewers abandon ITV in their droves,” Coatsworth said. “Expect more re-runs elsewhere, such as quizzes or lower-tier dramas, as that will be cheaper than commissioning new shows.”
I’m a Celebrity remains one of ITV’s top performers with 10.8m viewers watching last year’s series final on TV and online. Love Island regularly delivers ITV’s biggest audience of hard-to-reach 16-24 year-olds with 13m people following its official social media accounts.
Tom Harrington, head of Television at Enders Analysis, said Sky sees ITV as a second platform to show already aired on the satellite broadcaster, “potentially at the expense of current levels of new ITV programming. Whatever the initial intention, this will inevitably occur to some extent.”
There could be a churn of programmes between the two broadcasters with original Sky dramas and comedies filling slots on ITV.
Harrington added: “Gangs of London or (Sky comedy) Brassic might actually be a supportive complement to (ITV’s) Trigger Point and Midsomer Murders, and an altogether better outcome for Sky than their current onward destination, Netflix.” Those shows could be marketed prominently on ITV and generate more advertising revenue there than on Netflix.
However Sky sources said there was no intention to convert ITV into a pay-channel. “Sky is buying ITV because it a public service broadcaster with a large reach. It would defeat the point to reduce its reach by making it a subscription channel.”
ITV would continue originating its own prime-time shows, which appeal to a different “family” viewing audience to Sky subscribers, a well-placed insider said.
Love Island’s Kem Cetinay and Amber Davies. ITV Studios would continue producing the reality show under the Sky deal (ITV Studios)Fears over merged News
News journalists at the loss-making Sky News and competitor ITV News fear a merger could be the ultimate outcome, as the new combined company seeks savings.
“It could start with back-office savings but then you might see crews, footage and correspondents shared which means job losses,” said one figure.
Culture Secretary Lisa Nandy and Ofcom would be expected to examine whether the deal could reduce choice in news providers for viewers.
An ITV source said the network’s public service licence, which runs to 2034, places obligations on the channel to deliver national and regional news while 85 per cent of its peak schedule has to be British-originated. Sky would be free to seek to renegotiate those terms after 2034, the person said.
More sport and US imports
Sky is likely use ITV as a shop window, putting select live football matches on ITV, if it remained free-to-view, to tempt new subscribers, insiders said. ITV viewers would see a significant amount of cross-promotion for Sky’s TV and broadband services.
Comcast, Sky’s US owners, could bring ITV viewers the best American imports from its NBCUniversal stable, which this week announced a TV transfer of the popular game Wordle, as well as movies from Universal Pictures, set to release Steven Spielberg’s latest blockbuster Disclosure Day.
ITV said it remained in “active” talks with Sky over the “possible sale” of its TV broadcast and streaming business.
ITV News reported that the deal includes an agreement that ITV Studios would continue to produce Love Island, I’m a Celebrity! and The Voice for the ITV channel, along with Coronation Street and Emmerdale.
Analysts said ITV Studios, which makes hit shows for a range of channels, including Rivals for Disney, was a valuable production powerhouse but it will not be included in the ITV assets sold to Sky.
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