- ITV is selling its media and entertainment divisions to Sky
- The £1.6 billion deal is a massive shake-up for UK television
- Analysts say viewers could expect Sky and ITV’s offerings to merge in future
The UK’s TV landscape just changed in a big way, with ITV announcing that it’s agreed to sell its media and entertainment business to Sky in a massive £1.6 billion deal.
The agreement makes it one of the biggest deals in UK media history. It’ll see Sky take ownership of the ITVX platform and ITV’s free-to-air channels, but doesn’t include the ITV Studios production arm (which makes the likes of I’m A Celebrity and Mr Bates Vs The Post Office).
So what does this all mean for the average Downton Abbey fan or Sky subscriber? Will ITV’s channels remain free-to-air? 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-to-air?
Yes, for the foreseeable future at least. ITV has public service broadcasting commitments from its licence that run until 2034. The Sky deal doesn’t change that.
Tom Harrington, a TV analyst from Enders Analysis, says ITV being free-to-air is also likely one of the main reasons for the potential deal. “ITV remains profitable and the reach that it commands as the major 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 broadcast offerings to its online streaming platforms – and may 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 expansive catalogues available to them via streaming. As such, monetisation of this space is essential for broadcasters’ ongoing strategies,” said Peter Ingram, Research Manager at Ampere Analysis.
“A 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 subscription and advertising revenues,” he added.
In other words, expect ITVX and its ITVX Premium subscription to become the primary focus for Sky. Not that traditional broadcast TV will be left by the wayside.
“ITV’s linear operations could be rationalised, but key assets will remain in order to continue monetising the still sizeable audience that is loyal to linear TV”, Peter Ingram added.
What might this mean for current TV shows?
Major changes for ITV or Sky viewers are unlikely in the short term due to existing agreements and contracts. But one thing you can expect to see is more ITV shows on Sky, and vice versa.
“An immediate impact of a combination could be an element of integration of Sky and ITV’s programming assets,” Peter Ingram from Ampere Analysis predicts.
“The two companies are among the highest content spenders in the UK, with ITV providing a slate of locally resonant shows, news and sports rights. Sky provides local and international first-run and library film and TV series, major sports rights (such as Premier League football) and news. The two operators could utilise some of these programming assets across a combined entertainment ecosystem to greater effect,” he added.
However, Tom Harrington from Enders Research told us before the finalisation of the deal that changes could be more of a slow burn. “From a viewer perspective, in the short term there probably wouldn’t be many discernible changes: the ITV and Sky offerings would remain similar,” he said.
“In time, Comcast/Sky may have differing opinions to current ITV management about how to monetise on free-to-air and there could be channel changes and a differing approach to ITVX,” he added.
The nature of the deal – which doesn’t include ITV’s production arm, ITV Studios – might also eventually affect the kinds of shows you see on its channels. ITV Studios produces shows like Love Island and I’m a Celebrity… Get Me Out of Here and The Voice. Those could one day find a different home, some analysts predict.
“The biggest customer of ITV Studios is ITV itself, and more than half of all ITV’s viewing is from shows it makes itself in Studios,” Harrington explained. “So if Comcast/Sky was to acquire ITV broadcast then we would assume it would include a long-term agreement that guaranteed the flow of content from ITV Studios to the channels/ITVX,” he noted.
“However, even with some sort of agreement, over time you could foresee that the relationship between these two parts would weaken from current levels,” he said.
Is this good or bad news for TV viewers?
It’s still too early for definitive conclusions about the deal. However, experts have highlighted three potential impacts that are broadly good, bad, or mixed.
Based on previous mergers, there’s reason for some concern about TV quality, according to Tom Harrington from Enders Research. “Generally in a merger/acquisition such as this, the result is less content being produced overall, as savings and efficiencies are immediately sought. So overall there may be less on offer — although this may not necessarily be obvious to the viewer,” he said.
Still, on the plus side, the TV shows that do get made might be more widely available. “You would imagine that Sky may want to utilise Sky programming on ITV and vice versa. So certain viewers may get access to shows and some sport that they may not previously have had access to,” he added.
Peter Ingram from Ampere Analysis is also a bit more optimistic about the long-term health of TV shows on both ITV and Sky. “The increased scale provided by the group’s presence across TV and streaming would facilitate an even stronger revenue base, allowing for the production of more high-quality original programming for UK consumers,” he predicts. Let’s certainly hope so.
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mark.wilson@futurenet.com (Mark Wilson)
