ITV threatens ministers over catch-up reforms

Sky News has learnt that Adam Crozier, the company’s chief executive, has written to ministers to express deep concerns over Government proposals that will affect broadcasters with a public service remit, which include ITV and Channel Four.

Mr Crozier’s letter was sent to the Department for Culture, Media and Sport (DCMS) and the Treasury in recent days, according to insiders.

ITV is understood to have engaged a leading QC to prepare a possible legal challenge to the Government’s plans.

Ministers said this month that they would “bring forward legislation in the next year to modernise the licence fee to cover public service broadcast catch-up TV”.

The move was announced as part of a funding deal outlined in George Osborne’s Budget that will oblige the BBC to take on the £700m annual cost of providing free TV licences to the over-75s.

Under the current system, users of catch-up platforms like the BBC iPlayer and ITV Player do not need to buy a TV licence.

The Government’s proposals mean that a licence – the money from which is used to fund the BBC – will be required to watch digital services provided by ITV, Channel 4 or Channel Five even if viewers do not consume BBC content.

Industry sources said the decision had caused widespread alarm across the terrestrial TV sector, since subscription-based services such as those provided by Amazon and Netflix will be exempt from the requirement.

Sky plc, which owns Sky News, is among the commercial broadcasters which compete with ITV for rights deals and advertising revenue.

Earlier this week, the former presenters of the BBC’s popular motoring show Top Gear signed a lucrative deal to create a new programme for Amazon’s Prime platform.

A source close to ITV said it was “wholly unreasonable” to expect users of the company’s catch-up services to fund the BBC, and criticised the “unlevel playing field” that the Government’s move would create.

In a statement issued to Sky News, a DCMS spokesman said:

“The Government has agreed to look at bringing forward legislation in the next year to modernise the licence fee to cover public service broadcast catch-up TV to reflect changing technology and viewing habits.

“Details of what the legislation will cover are being considered and we will set out next steps in due course.”

A Whitehall source said “it stands to reason that the fee should be modernised in this way”.

ITV’s concern over ministers’ plans to overhaul public service broadcasters’ catch-up services follows the separate publication this month of a Green Paper on the future of the BBC.

The document posed a number of questions about the Corporation’s future, including whether it was “chasing ratings rather than delivering distinctive, quality programming that other providers would not”.

On Friday, Liberty Global, the owner of Virgin Media, increased its stake in ITV to 9.9 per cent although it repeated an earlier assertion that it did not plan a takeover bid for the UK company.

Earlier this week, ITV reported a 25 per cent rise in half-year pre-tax profits despite a fall in audience numbers.

The company declined to comment on Mr Crozier’s letter to ministers.